What is a 401(k)
A 401k is an employer sponsored retirement plan. A percentage of the employee's paycheck goes directly to a 401k account, to which the employer adds profit-sharing contributions.
Money contributed to the account by the employer in addition to the employee's paycheck deductions is a major incentive of the 401k plan. Also a great incentive, income set aside in a 401k is not taxable until withdrawn at age 65 or older.
What is a 403(b)?
A 403b is a retirement plan for employees of universities, the civil government, and not-for-profit organizations. It is similar to the 401k with payroll deductions that go directly to the 403b account, employer contributions, and the same tax benefits.
From IRAs to 401(k) and 403(b) plans, today's retirement solutions offer tax-deferred or tax-free growth. Which is best for you?