Non-Governmental 457 Plan
1 A 403(b) is a type of employer-sponsored retirement plan available generally to employees of nonprofit and educational organizations (e.g., public schools) defined in Section 501(c) (3) of the Internal Revenue Code. A 403(b) retirement plan allows the participants to save their own money on a pretax or Roth aftertax basis.
2 A 401(k) plan is a tax-deferred payroll savings account offered to employees of businesses that offer a program. Employers may also make contributions, such as a matching contribution. Savings may be pretax and, together with earnings, if any, are taxable when distributed. Savings also may be after-tax (called a Roth 401(k) option) and, together with earnings, potentially tax-free when distributed, if distribution occurs after five years of participation and age 59½. After-tax 401(k) savings are always tax-free whenever distributed.