A 403(b) is a retirement plan offered by nonprofit organizations. Employees contribute a percentage of their salary into a 403(b) account. These contributions grow until withdrawal, at which point the money is taxed as regular income.
A 403(b) is a retirement savings plan available to employees of nonprofit organizations in the U.S. Typically, under a customary 403(b) plan, an employee permits a percentage of his/her pre-tax income to be invested by placing it into a 403(b) account. Taxation is delayed until removal from the account. Usually this occurs after retirement. In order to take advantage of a 403(b) plan, workers must have a sponsoring employer such as a charity or a foundation. This plan is considered a nonprofit worker’s equivalent of a 401(k). These plan are also referred to as a TSA (tax sheltered annuities).