A 403(b) is a tax-advantaged retirement plan similar to a 401(k) plan, but designed for employees of school systems, nonprofit hospitals, religious organizations and other tax-exempt employers, known as 501(c)(3) organizations. Eligible Organizations: - Public education organizations, including primary and secondary schools, state colleges and universities, and junior colleges.
- Nonprofit organizations, including hospitals, religious organizations, charitable institutions and social welfare agencies.
Participant contributions are 100% immediately vested; if employer contributions are offered, they may be subjected to a vesting schedule. Each employee participating in the plan determines how much money is to be automatically contributed from each paycheck. Generally, participants can invest an annual maximum of $24,500 in 2026 or $32,500 for those age 50 to 59 and 64+, or $35,750 for those age 60 to 63. (The higher catch-up limit is effective January 1, 2026, and is only applicable to participants who attain ages 60, 61, 62, or 63 in 2026.) Should you leave the job offering the 403(b), there are options when your employment ends: - Roll over to an IRA: Rolling 403(b) assets to an IRA can allow participants to keep the same tax benefits, avoid penalties, and choose from a wide range of investment options.
- Stay in the old plan: Participants may be able to remain in the plan and keep the same benefits.
- Move to a new plan: If the participant’s new employer accepts rollovers, participants can keep the tax benefits while consolidating their retirement plan money.
- Cash out: Participants will owe applicable taxes and, if not yet age 59½ (unless an exception applies), an additional 10% early distribution tax. You will also be losing the tax benefits that come with a retirement plan account.
To dive deeper into 403(b)s, click here. If you’re interested in us doing an analysis of your current employee plan to see if it aligns with your retirement goals, please call us: (518) 584-2555. | 
