Sunday, December 13, 2015

401k vs. 403b

If you are a a government employee and getting ready to invest in a retirement plan there are a number of options that you might be considering.  Knowing which is best for you isn't always obvious.  After browsing through Ed4Ed you will notice a number of differences.  When considering a 401(k) and 403(b) plan here are some things to consider.

Both Plans

  • Offer tax-advantage options. 
  • Have the same contribution limits.
  • Offer Roth options.
  • Require participants be 59.5 to withdraw from plan.
  • Grow tax-deferred.


  • type of employer that is sponsoring the plan 
  •  A 401k is often administered by one company.  In a 403b the organization also has no ownership of the 403b plan.
  • 403b generally exempt from the Employee Retirement Income Security Act (ERISA).
    Additional Information here.

Picking a Plan

Regardless of what plan you decide to choose it is important to remember that having a retirement plan is an important step in safeguarding your future. Before you choose a plan know all of the ins and outs for each type of plan offered. Often times a financial planner can be consulted to help clarify which pension would work best to meet your needs.

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