The U.S. Internal Revenue Service describes 403(b) retirement plans as plans that allow an employee to defer a percentage of his pre-tax income into an account where taxes remain deferred until distribution. These plans work similarly to the 401(k) plans offered by for-profit organizations, but 403(b) plans are only available to employees of public education systems, churches and tax-exempt charities and non-profits.Know More
According to the IRS, 403(b) plans allow an employee a high level of flexibility when determining how much to contribute to his retirement savings accounts. Some employers elect to fully or partially match an employee's contributions, but they are not required to do so. An employee may contribute up to $17,500 a year, but this amount is lowered if he also contributes to other types of retirements accounts, including Roth accounts and 401(k) plans.
The IRS states that one of the disadvantages of a 403(b) plan is that an employee's investment options are limited to those selected by the employer. Some of these investment options also come with high administrative fees that cut into the account's total profit. An employee is allowed to withdraw from his 403(b) account when he reaches age 59 1/2. At the time of withdrawal, taxes are assessed on the account. Withdrawals from these accounts are also permitted if an employee loses his job, is disabled, dies or experiences a qualified financial hardship.Learn More
A 414h retirement plan is a tax-deferred government retirement plan. It is a money purchase initiative in which government employers mandate employee contributions, which are then “picked-up” by the employer to be formally characterized as “employer contributions.”Full Answer >
There are three popular retirement plans for self-employed people: the SEP-IRA, SIMPLE IRA and solo 401(k) plans. These plans differ according to the rules governing them, and the right plan depends on how much an individual wants to contribute and whether the concerned individual has, or plans to have, employees.Full Answer >
There is no such thing as a 401(b) plan, but according to the official website of the Internal Revenue Service, a 403(b) plan is a retirement plan similar to a 401(k) plan that allows employees to contribute a portion of their salaries into individual retirement accounts. Employers eligible for this plan include public schools, churches and other tax-exempt organizations.Full Answer >
Some people dream of leisure activities and relaxation during retirement, but others prefer to remain active through part-time work, volunteering and hobbies. Some people use their newfound freedom to travel or play golf, while others take classes to keep their minds stimulated.Full Answer >