Editing 403(b) (section)

{{Short description|Type of retirement/pension plan in the United States}}
In the [[United States]], a '''403(b)''' plan is a U.S. [[tax]]-advantaged [[retirement]] savings plan available for [[public education]] [[organization]]s, some [[Non-profit organization|non-profit]] employers (only [[Internal Revenue Code]] [[501(c)(3)]] organizations), cooperative hospital service organizations, and [[self-employed]] [[minister of religion|ministers]] in the [[United States]].<ref>{{Cite web|url=https://www.irs.gov/publications/p571/ch01.html|title=403(b) Plan Basics|website=irs.gov|publisher=Internal Revenue Service|access-date=2016-09-02}}</ref> It has tax treatment similar to a [[401(k)]] plan, especially after the [[Economic Growth and Tax Relief Reconciliation Act of 2001]].<ref>{{Cite web|url=https://money.cnn.com/retirement/guide/401k_403bplans.moneymag/index2.htm|title=How is a 403(b) different from a 401(k)?|website=cnn.com|access-date=2016-09-02}}</ref> Both plans also require that distributions start at age 72 (according to the rules updated in 2020), known as [[Required minimum distribution|Required Minimum Distributions (RMDs)]].<ref>{{Cite web |last= |title=401(k) and 403(b) Plans: What's the Difference? |url=https://www.investopedia.com/ask/answers/100314/what-difference-between-401k-plan-and-403b-plan.asp |access-date=2023-05-18 |website=Investopedia |language=en}}</ref> Distributions are typically taxed as ordinary income.

Employee salary deferrals into a 403(b) plan are made before [[income tax]] is paid and allowed to grow [[Deferred tax|tax-deferred]] until the money is taxed as income when withdrawn from the plan.

403(b) plans are also referred to as a '''tax-sheltered annuity''' ('''TSA''') although since 1974 they no longer are restricted to an annuity form and participants can also invest in [[mutual fund]]s.<ref>{{cite web|url=http://403bwise.com/highered/section/52|title=The 403(b) Basics|website=403bwise.com|access-date=2016-09-02}}</ref>