403(b)
Business & Finance abbreviation · Personal Finance
| Stands for | Tax-sheltered annuity plan (Internal Revenue Code section 403(b)) |
|---|---|
| Categories | Business & Finance |
403(b) stands for Tax-sheltered annuity plan (Internal Revenue Code section 403(b)), a personal finance abbreviation.
Retirement savings plan for employees of public schools, colleges, hospitals, churches and other 501(c)(3) nonprofits. It works much like a 401(k), with payroll deferrals, optional Roth contributions and the same elective deferral limit, but older plans were invested mainly in annuity contracts rather than mutual funds.
Example: As a public school teacher, she contributes to the district's 403(b) and a separate 457(b) plan.
Usage notes
Pronounced "four-oh-three-bee." The IRS still calls these tax-sheltered annuity (TSA) plans, a name dating to their creation in 1958. Employees with 15 or more years at the same qualifying employer may be eligible for an extra catch-up contribution. Consumer advocates have long warned that some school-district 403(b) menus are dominated by high-fee annuity products, so investment options deserve a close look.
Related abbreviations
More personal finance abbreviations
- 401(a) – Qualified retirement plan (Internal Revenue Code section 401(a))
- 401(k) – Employer-sponsored retirement savings plan (Internal Revenue Code…
- 457(b) – Deferred compensation plan (Internal Revenue Code section 457(b))
- 529 – Qualified tuition program (Internal Revenue Code section 529)
- ABLE – Achieving a Better Life Experience account
- AER – Annual equivalent rate
- APR – Annual percentage rate
- APRC – Annual percentage rate of charge
- APY – Annual percentage yield
- AU – Authorized user
- BT – Balance transfer
- CIBIL – Credit Information Bureau (India) Limited