403(b) Plans
For employees of public schools, colleges, universities, hospitals, and nonprofit organizations
Your Contributions Limits
To learn more about how much you can contribute, view Contribution and Benefit Limits for Retirement Plans
You can increase or decrease the amount you contribute to the plan as often as your employer allows.
Catch-up Contributions - (if permitted under your employer’s plan)
If you are age 50 or older, you may be eligible to make additional contributions.
If you have 15 or more years of service with the same employer, you may also be able to make catch-up contributions. Refer to your employer’s plan summary for details.
Account Consolidation
If permitted under your current and prior employers’ plans, you can transfer your vested account balance from a prior employer’s retirement plan to your current employer’s plan. This can make it easier for you to track your retirement savings and maintain a suitably diversified investment portfolio. Always make sure that you find out what, if any, surrender charges may apply before you initiate a transfer.
Vesting Status
You are always 100% vested in your own contributions, transferred and rollover contributions, and any earnings they generate.
Withdrawals and Distributions
Generally not available before age 59½ unless you terminate employment, have a financial hardship, are disabled, or die. A plan may also permit an in-service distribution for Childbirth and Adoption Expenses without a federal income tax penalty. Amounts distributed are taxable as ordinary income and, if taken before age 59½, may incur a 10% federal income tax penalty.*
A plan may also permit an in-service distribution for Childbirth, Adoption Expenses and Federally Declared Disasters without a federal income tax penalty. Amounts distributed are taxable as ordinary income. * Repayment of these distributions must generally be repaid within 3 years.
Individuals generally must begin taking distributions out of their retirement account, which are:
- Age 70 1/2, if born before July 1, 1949,
- Age 72, if born on July 1, 1949, and before 1951,
- Age 73, if born between 1951 and 1959, and
- The age will further increase in future years.
Other Plan Features
Availability of employer contributions, the Roth 403(b) option, loans, and hardship withdrawals varies by plan. Check your employer’s plan summary to see if these features are offered.
Learn More
About your employer’s 403(b) plan: refer to your employer’s 403(b) plan summary.
About 403(b) plans in general: refer to IRS Publication 571, http://www.irs.gov/publications/p571/index.html.
* If your employer’s plan permits Roth 403(b) contributions, note that distributions of Roth 403(b) contributions are tax-free; distributions of earnings on Roth 403(b) contributions are also exempt from federal (and possibly state) income taxes if certain conditions are met. Refer to your employer’s 403(b) plan summary for details.
