403(B) Plan Checklist

403(B) Plan Checklist is a 1-page tax-related document that was released by the Internal Revenue Service (IRS) - a subdivision of the U.S. Department of the Treasury on August 1, 2021.

FAQ

Q: What is a 403(b) plan?
A: A 403(b) plan is a retirement savings plan for certain employees of public schools, tax-exempt organizations, and certain ministers.

Q: Who is eligible for a 403(b) plan?
A: Employees of public schools, tax-exempt organizations, and certain ministers are eligible for a 403(b) plan.

Q: What are the benefits of a 403(b) plan?
A: Some benefits of a 403(b) plan include tax advantages, employer matching contributions, and the ability to save for retirement.

Q: What is the contribution limit for a 403(b) plan?
A: The contribution limit for a 403(b) plan is $19,500 for 2021.

Q: Can I contribute more than the annual limit to a 403(b) plan?
A: If you are age 50 or older, you may be eligible to make catch-up contributions of up to $6,500 in addition to the annual limit.

Q: How are 403(b) plans different from 401(k) plans?
A: The main difference between 403(b) plans and 401(k) plans is that 403(b) plans are available to employees of public schools and tax-exempt organizations, while 401(k) plans are primarily for private sector employees.

Q: Can I take a loan from my 403(b) plan?
A: Some 403(b) plans may allow for loans, but it is important to check with your plan provider to see if loans are available and what the requirements are.

Q: Can I withdraw money from my 403(b) plan before retirement?
A: In general, you can only withdraw money from your 403(b) plan before retirement if you meet certain qualifying events, such as reaching age 59½, becoming disabled, or experiencing financial hardship.

Q: Are there any penalties for early withdrawal from a 403(b) plan?
A: Yes, if you withdraw money from your 403(b) plan before age 59½, you may be subject to a 10% early withdrawal penalty in addition to ordinary income taxes.

Q: Can I roll over my 403(b) plan into another retirement account?
A: Yes, you can roll over your 403(b) plan into another eligible retirement account, such as an Individual Retirement Account (IRA) or another employer's retirement plan, if allowed by the receiving plan.