401(k) and 403(b)
If you don’t take advantage of the opportunity to invest in a 401(k) or 403(b) at work, you’re wasting money. Here’s the difference between 401(k) and 403(b) and how you can take advantage of these benefits.
Learn more about the differences between 401(k)s and 403(b)s:
The differences between 401(k)s and 403(b)s
How do employer-sponsored retirement accounts work? How much free money will the organization you work for contribute to your retirement? And how can participating put you on the path to financial security?
In today’s episode of Queer money® we share all the differences between 401(k)s and 403(b)s. We explain how employees contribute to these accounts through a payroll deduction and what types of mutual fund managers use this money.
We’ll then discuss the similarities between 401(k)s and 403(b)s, highlighting the same contribution limits, withdrawal fees, and tax-free surpluses. Listen in to learn what makes the 401(k) different from the 403(b) when it comes to investment options, and learn how participating in your employer-sponsored retirement account can help you achieve financial security!
Topics covered on the difference between 401(k) and 403(b)
The best ways to achieve financial security
- Home ownership
- Employer-sponsored retirement accounts
- Invest in real estate or stocks
The basics of an employer-sponsored retirement account
- 401(k) and 403(b) are the most common types
- Make contributions through payroll deduction
- Employer, Administrator and Participants
The Difference Between a Roth and a Traditional 401(k)
- Traditional receives tax breaks when money is withdrawn
- Roth gets tax break at the end (when $ is withdrawn)
The 3 Investments Related to 401(k) + 403(b)
- Mutual funds
- ETFs
- Managed portfolios
Why 401(k) and 401(b) are the same
- Contribution limit of $19,000, up to $25,000 for catch-up needs
- 10% withdrawal penalty before age 59
- Employer match up to a certain amount or percentage
- Plan administration fee + transaction fees
- Tax-free transfer when leaving the employer ($take with you)
What’s special about the 403(b)
- Tax-exempt organizations (non-profits, hospitals, or schools)
- Usually indestructible straight away
- An additional $3,000 per year can be awarded after 15 years on the job
- Fewer investment opportunities
What’s special about the 401(k)
- Non-profit, listed companies
- A hold period is usually required
- Can purchase shares of the company at a cheaper price
- You may have access to socially responsible funds
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