Whats the difference between a 401k and a 403B?

Question

Everyone talks about their 401k. I have a 403B and it sounds like they are the same thing. Are they?

My organization just lost their tax exempt status and had to pay 6 million dollars in back taxes. Will this affect my contributions to my 403b? I recieve an employee match

Answer 1

Close. Follow the link to the differences.

Answer 2

They are basically the same thing the 403B is when you work at a non-profit tax exempt organizations. 401K is for everyone else. I have both. 403B form when I worked for the Catholics, and 401K from another employer. The last time I checked you couldn't merge them into 1.

Answer 3

The 401(k) plan is a type of employer-sponsored retirement plan named after a section of the United States Internal Revenue Code. A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money or earnings until withdrawal. Comparable types of salary-deferral retirement plans include 403(b) plans covering workers in educational institutions, churches, public hospitals, and non-profit organizations and 457 plans which cover employees of state and local governments and certain tax-exempt entities.

A 403(b) plan is a tax advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations) and self-employed ministers in the United States. It has tax treatment extremely similar to a 401(k) plan, especially after the Economic Growth and Tax Relief Reconciliation Act of 2001. Simply put, employee salary deferrals into a 403(b) plan are made before income tax is paid on it, and allowed to grow tax deferred until the money is taxed as income when taken out of the plan. Beginning in 2006, 403(b) and 401(k) plans may also include designated Roth contributions, i.e., after-tax contributions, which, if certain requirements are met, will allow tax-free withdrawals. Primarily the designated Roth contributions have to be in the plan for at least five-taxable years.

Answer 4

The "401(ok) plan," the popular call for a qualified funds or deferred affiliation (CODA) authorized under area 401(ok) of the interior gross revenues Code (IRC), is between the main favourite styles of corporation-backed retirement plans. A 403(b) plan is a undeniable style of corporation-backed retirement plan for specific religious, public academic, and tax-exempt companies. commonly, the corporation the two purchases annuity contracts for eligible workers, or establishes custodial money owed to be invested in mutual money or different investments. interior the case of annuity contracts, a 403(b) plan is each and every so often stated as a tax-deferred annuity or a tax-sheltered annuity plan (TSA). reckoning on the specific style of 403(b) plan, plan contributions may be made by in basic terms the worker, in basic terms the corporation, or the two worker and corporation A 403(b) plan isn't a qualified retirement plan, in spite of the undeniable fact that it mimics certainly one of those plan in that it enjoys comparable tax reward. the main considerable income is that engaging workers are often no longer taxed on their plan reward (inclusive of the two contributions and investment income) till they start to get carry of distributions from the plan. whether an corporation tax deduction may be achieveable, it is often of little or no value, because of the fact the corporation is exempt from income tax besides. often speaking, 403(b) contributons at the instant are not matched, whilst maximum 401(ok)s have some corporation matching provisions for contributions.

Answer 5

Yes, they are technically the same tax-defferred retirement program
401k is for private employees like IBM,verizon,att
403b for state, hospital,teachers,and non profit organization employee

but they are all work the same way

Answer 6

The difference is the type of plan sponsor. 401(k) plans are organized by businesses, 403(b) plans, by non-profits.