Difference b/w 401K and 403B

#2 02-18-2004, 11:47 AM

I work for a not-for -profit hospital and they offer a 403B. I think thats the
difference.

- quote -

> However, if each has a different name (or code), some
> other
> > things also gotta be different, like how they work and what kind of
> > restrictions and rules each of them has, right?

#1 02-15-2004, 05:10 PM

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:102tfeca2f0m069[at]corp.supernews.com...
- quote -

> One thing I have noticed is 403B is for certain professions and 401K is
for
> everybody else. However, if each has a different name (or code), some
other
> things also gotta be different, like how they work and what kind of
> restrictions and rules each of them has, right?
> How are they different?

Not all 403(b)s are subject to ERISA, with the advantages and disadvantages
that come with that law.

403(b) salary savings always belong to the participant, just like an IRA.
One need not separate from service to transfer the money to another 403(b),
even one not sponsored by their current employer. While there is no law
prohibiting inservice rollovers from 401(k) plans, most plan providers don't
want that kind of freedom, so they package their products in a way that
prohibits it -- and have no problem convincing employers that these
transactions are costly.

There are some other differences, especially when you go back in time --
older 403(b)s have differences, such as an age 75 for minimum distributions
to begin, etc.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

02-15-2004, 09:45 AM

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:102tfeca2f0m069[at]corp.supernews.com...
- quote -

> One thing I have noticed is 403B is for certain professions and 401K is
for
> everybody else. However, if each has a different name (or code), some
other
> things also gotta be different, like how they work and what kind of
> restrictions and rules each of them has, right?
> How are they different?
> 403(b) Predates 401(k) and was/is restricted to not for profit concerns.
Both plans are further restricted by Code Section 415. Hopefully someone

more current than I am will explain the differences. Congress has been
working to make the plans converge.

Brent Rowell

#-1 02-14-2004, 11:53 PM

One thing I have noticed is 403B is for certain professions and 401K is for
everybody else. However, if each has a different name (or code), some other
things also gotta be different, like how they work and what kind of
restrictions and rules each of them has, right?

How are they different?

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