A 403(b) plan is a tax-advantaged retirement savings account in the United States, primarily offered to employees of nonprofit organizations, public schools, and certain religious institutions.
Similar to a 401(k) plan, it allows employees to contribute a portion of their salary to their retirement savings before taxes, reducing their taxable income.
Employers may also make contributions to the plan. 403(b) plans offer investment options such as mutual funds or annuities, and the savings grow tax-deferred until retirement. Withdrawals are then taxed as ordinary income. These plans are designed to help individuals save for retirement while working in the nonprofit sector.