403(b) Plan
A 403(b) plan is a tax-advantaged retirement savings account for employees of public schools, tax-exempt organizations, and certain ministers, allowing pre-tax contributions up to $23,500 in 2025.
Exam Tip
403(b) is for nonprofits/schools only. Remember the unique 15-year service catch-up ($3,000/year, $15,000 lifetime).
What is a 403(b) Plan?
A 403(b) plan is an employer-sponsored retirement plan for public schools, 501(c)(3) nonprofits, and churches.
2025 Contribution Limits
| Contribution Type | 2025 Limit |
|---|---|
| Employee Deferrals | $23,500 |
| Age 50+ Catch-Up | +$7,500 |
| Ages 60-63 "Super" Catch-Up | +$11,250 |
| 15-Year Service Catch-Up | Up to $3,000/year |
403(b) vs. 401(k)
| Feature | 403(b) | 401(k) |
|---|---|---|
| Employer Type | Nonprofits | For-profit |
| 15-Year Catch-Up | Available | Not available |
Study This Term In
Related Terms
401(k)
A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute pre-tax dollars, with potential employer matching, and tax-deferred growth until withdrawal.
Defined Contribution Plan
A defined contribution plan is a retirement plan where contributions are made to individual accounts, with the final benefit depending on contributions and investment performance.
Catch-Up Contributions
Catch-up contributions allow workers age 50+ to contribute extra amounts above normal limits to retirement accounts including 401(k), IRA, and 403(b) plans, with SECURE 2.0 adding super catch-up for ages 60-63.
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