403(b) Retirement Plans

Enroll in your plan

What is a 403(b) retirement plan?

A retirement plan may be one of the most valuable benefits of employment. Used effectively, it can deliver a long-term impact on your financial well-being. See how a retirement plan works and learn about the power you have to control your financial future.

If you work for a tax-exempt organization, a 403(b) plan is a tool that may help you reach your retirement goals. 403(b) retirement plans are also known as tax-sheltered (or tax-deferred) annuities.

Tax-deferred 403(b) plans are designed for employees of:

Public schools
Colleges and universities
Churches and other religious organizations
Tax-exempt, non-profit organizations such as charities or certain hospitals

Why participate?

A 403(b) plan lets you set aside a portion of your salary in an employer-sponsored account to save for retirement. Some employers may also match your contribution.

You don’t pay taxes on your contributions to the plan. You also don’t pay taxes on any earnings your account accumulates until you withdraw the money, which ideally happens when you’re retired. And by then you may be in a lower tax bracket.

Professional advice

With a 403(b) retirement plan, you can typically invest in fixed annuities, variable annuities or mutual funds. Ask your financial professional to help you choose investments that best meet your retirement objectives. Just keep in mind that investing involves market risk, including possible loss of principal. And there's no guarantee that your investment objectives will be met.

If your employer doesn’t offer a 403(b) plan, find out if they have another kind of retirement plan. Or ask your financial professional about other ways to start investing for retirement.

Early withdrawals

Because 403(b) plans were created to help you save for retirement, there may be an additional 10% early withdrawal tax for withdrawing money early.

In addition, any money withdrawn will be subject to ordinary income taxes. The withdrawal amount will also be subject to mandatory 20% federal income tax withholding unless the entire amount is rolled.