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403(b) Plan
Term category: Retirement
In 10 words or less: A retirement vehicle that has certain tax advantages.

Definition: This is much like a 401(k) plan in that it's a retirement account that allows you to make salary contributions. The difference is that 403(b) plans are typically utilized by people who are members of public organizations (such as schools), church organizations, or other non-profits.

One downside: Like 401(k) plans, these are directed by the organization you work for, so you are not given quite as many investment possibilities. Most organizations will either hire an outside professional to manage the 403(b) plans or they will contract with a mutual fund company to give you a small, core group of mutual funds to choose from.

StockJargon advice: Because of the match most organizations make (50-100% match), it's in your best interest to utilize your 403(b) plan. However, because 403(b) plans limit the amount you can contribute, we also recommend opening up another investment account as well.

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Related Books

Beyond 401 by John Wiley & Sons
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The Essential Guide to Your 401(k) Plan By Virginia Morris

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