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Retirement 101: 403(b) and 457(b) retirement plans and how they differ from 401(k)s
Posted By Ron On May 10, 2012 @ 8:06 AM In Investing,Retirement | Comments Disabled
403(b)  plans are similar to 401(k)  plans but are reserved for employees of tax-exempt nonprofit organizations, such as public schools, hospitals, foundations, charities, and churches and other religious organizations. Like 401(k)s , 403(b)s allow you to set up tax-deferred accounts and invest  in mutual funds, stocks, bonds and various other investments.
All of the major features of 403(b)  plans—tax benefits, eligibility, vesting, contribution limits, and so on—mirror those of 401(k)  plans. Moreover, 403(b)s work the same way as 401(k)  plans: you invest  pretax dollars, and the assets in the account grow tax-deferred. Or, under the Roth 403(b) variation, you invest  after-tax dollars that grow tax-deferred and are tax-free upon withdrawal.
The “catch-up” provisions for 403(b)s mirror those of the 401(k) retirement plan  – if the employer matches contributions, the annual maximum the employee can contribute is the standard $17,000 plus a “catch-up” amount of $5,500 (employers are maxed at $33,000). The one unique trait of 403(b)s is a “catch-up” provision available only to employees with 15 or more years of service with a qualified organization. If you qualify, this provision increases your contribution limit by up to $3,000 per year, up to a total lifetime catch-up limit of $15,000. If you’re over age 50, you can combine this catch-up provision with the more universal $5,500 per year catch-up contribution, which would enable you to contribute a total of up to $26,500 (for 2012) annually to your 403(b) plans.
457(b) plans are very similar to 401(k)s and 403(b)sbut are available only to U.S. government employees and employees of certain nongovernmental tax-exempt U.S. employers, such as public schools and universities.
457(b) plans are similar to 401(k)s  and 403(b)s, with the following major exceptions:
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