What Is A 403(b) Investment Plan?

A 403(b) investment plan is a retirement plan for public school employees and tax-exempt organizations and ministers. There are different forms of 403(b) plans available including:

1. an annuity contract provided by an insurance company (also called tax-sheltered annuities or tax-deferred annuities)

2. a custodial account – investments however are limited

3. a retirement account income – investment options are annuities or mutual funds

What are the advantages of maintaining a 403(b) account?

For the employee:

1. reduced taxable income

2. tax deferred earnings on plan contributions

3. the ability to take loans from a 403(b) account

For the employer:

1. can serve as an attractive benefit to keeping great employees

2. employees and employers share the cost of funding this type of investment plan

   403(b)s are offered through Lincoln Investment

   Withdrawals are taxed as ordinary income in the year received. Tax penalties and penalties for early withdrawal may apply if funds are withdrawn prior to age 59 ½.