What you need to know about your 401k, 403b, 457b, or TSP
What is a 401(k):
A qualified retirement plan established by an employer to which eligible employees may make salary-deferred contributions. (i. e. contributions are deducted from employee’s paycheck.)Learn more:
- Contributions are made from your paycheck before taxes are deducted
- Employers may make matching or non-elective contributions to the plan
- Employers may add a profit-sharing feature to the plan
- Earnings in your 401(k) accrue on a tax-deferred basis
What is a 403(b):
Also known as a Tax-Sheltered Annuity, this is a retirement plan for qualifying employees of public schools, tax-exempt organizations, and church ministers. Eligible employees may make salary-deferred contributions.
Learn more:
You may have any one of the following account types in your 403(b) plan -
- Annuity contract - provided through an insurance company
- Custodial account - invested in mutual funds.
- Retirement income account - created for church employees, this type of account is usually invested in either Annuities or Mutual Funds
What is a 457(b):
A non-qualified, deferred compensation plan established by state and local governments and tax-exempt employers for qualifying employees.
Learn more:
- Eligible employees are allowed to make salary-deferred contributions to the plan
- Earnings grow on tax-deferred basis and contributions are not taxed until the assets are distributed from the plan
- Employers may make matching or non-elective contributions to the plan
What is a TSP:
What is a TSP
