What is 403b
A 403(b) plan refers to a retirement account designed for certain employees of public schools and other tax-exempt organizations. Participants may include teachers, school administrators, professors, government employees, nurses, doctors, and librarians. The 403(b) plan, which is closely related to the better-known 401(k) plan, allows participants to save money for retirement through payroll deductions while enjoying certain tax benefits.
Contribution Limits
Your 403(b) plan has contribution limits and early withdrawal penalties. The limit on elective salary deferrals - the most an employee can contribute to a 403(b) account out of salary - is $23,000 in 2024. Employees who are age 50 or over at the end of the calendar year can also make catch-up contributions of $7,500 in 2024 and 2023 beyond the basic limit on elective deferrals.1
Working with Your Financial Advisor
A 403(b) plan can become the cornerstone of your personal retirement savings program, providing the foundation for your future financial security. Consult with your plan administrator or financial advisor to help you determine how your employer’s 403(b) plan could help make your financial future more secure.
403b Advantages
Tax-deferred contributions and earnings on traditional plans.
Tax-free withdrawals for qualified distributions from Roth-style plans.
Choice among different asset classes and investment vehicles. Potential for employer-matching contributions.
403(b) vesting schedules are typically shorter that 401(k) plans.
How does SBDA Work?
For many years, the investment options offered in workplace retirement plans were limited to a pre-selected list of mutual funds and annuity contracts. Today, thousands of employers have enhanced their retirement plans to include a brokerage window opportunity so that plan participants have more choice and greater flexibility with their retirement investments. This option, known as the Self-Directed Brokerage Account (SDBA), exists in 401(k), 403(b), or 457 plans where participants have access to stocks, bonds, mutual funds, and ETFs. Through The Pacific Financial Group, you can access solutions supported by the world’s largest and most respected investment managers, customized to your own personal tolerance range.
