403(b) Retirement Plan

RetireBetter offers ERISA and Non-ERISA 403(b) plans to help non-profit organizations deliver an employee retirement experience that rivals any corporate plan.

Overview of the 403(b) Plan

A 403(b) plan is a specific type of retirement savings plan that is typically available to employees of non-profit organizations, educational institutions, and certain public entities. This plan allows employees to contribute a portion of their salary into a retirement account through salary deductions while enjoying tax advantages.


The 403(b) plan is established under Section 403(b) of the U.S. tax code and is designed to help employees of non-profit organizations and educational institutions build retirement savings. Similar to private sector 401(k) plans, a 403(b) plan offers a convenient way to save and invest for retirement. Its key feature is that employees can choose to contribute a portion of their salary into a retirement account before taxes, thus benefiting from tax advantages.

How the 403(b) Plan Works

Salary Deferrals: Participants in a 403(b) plan can contribute a portion of their salary directly into a retirement account through salary deferrals, which means they do not pay taxes on those contributions until they withdraw the funds. Generally, employees can choose to contribute up to the maximum amount allowed by law.


Employer Contributions: Many employers provide a matching contribution to employees' 401(k)plans. This is essentially free money, as the employer matches a percentage of the employee's contributions up to a certain limit. The employer match boosts your retirement savings and accelerates the growth of your funds.


They can also contribute what is called a non-elective contribution, which is made to all eligible employees whether you contribute from your salary. It is important to know what your employer offers to take full advantage of this benefit.


Tax Advantages: A 403(b) plan offers tax advantages. Employee contributions are usually made on a pre-tax basis, reducing their taxable income. Additionally, investment earnings grow tax-deferred until retirement, at which point they are subject to taxes upon withdrawal.


Investment Options: 403(b) plans typically offer mutual funds. Employees can choose an investment portfolio based on their risk tolerance and investment goals.

Other Advantages of a 403(b) plan

Our 403(b) plan services allows for a wide range of investment options, allowing participants to diversify their holdings and tailor their investments based on their risk tolerance and retirement goals. Our platform is open-architecture, meaning that virtually any qualified mutual fund can be made available as an investment option.


Also, contributions to a 403(b) plan are often portable, meaning that if an individual changes jobs, they can roll over their 403(b) funds into another eligible retirement account without penalties or taxes.

Types of Employee Contributions

Traditional Pre-Tax 403(b) Contributions: 403(b) plans allow employees to make pre-tax contributions through salary deferrals into their retirement accounts. Participants can select investment options according to their preferences and pay income tax upon withdrawal during retirement, based on prevailing tax rates.


Roth 403(b) Plan Contributions: In contrast to the pre-tax contribution, this allows employees to contribute after-tax dollars into their retirement accounts. Because of this, it allows withdrawals to be made during retirement on a tax-free basis. The Roth 403(b) plan is suitable for individuals who anticipate higher tax rates in retirement or who have a long time until retirement and have the opportunity for significant portfolio growth.


The 403(b) plan is specifically designed for employees of non-profit organizations, educational institutions, and public entities and offers tax advantages and a range of investment options to help individuals build a secure financial future in their retirement years.


At RetireBetter, we specialize in providing comprehensive retirement planning services, including tailored guidance and support for individuals looking to maximize the benefits of their 403(b) plans. Contact us to learn more about how we can help you retire better.