Summary of 403(b) Plans

For employees of non-profit organizations, the 403(b) plan provides a flexible retirement plan that allows both the employer and employee the opportunity to make contributions. Although the amount of contributions is limited, the 403(b) is an attractive plan for those who seek to save for retirement. Plan contributions are excluded from taxable income but are taxed when they are withdrawn. There may also be a penalty for premature distributions from the plan.

Plan assets may be invested in a wide variety of investment vehicles. Also, the employee may direct which investments to use within the plan. 403(b) plan distribution options are also flexible, allowing the participant to choose a lump sum distribution, periodic payments, or even guaranteed payments for life.