HW \"Skip\" Weldon"
<skip5700removethis[at]hotmail.com> wrote:

- quote -

Apologies all around. My proof reader obviously needs to
lay off the bourbon and branch water. The above sentence
should be... "And the qualified plans (401k and 403b) have
slightly different distribution rules..."

-HW "Skip" Weldon
Columbia, SC

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

"rlsusenet[at]NOSPAMPUHLEEZschnapp.org" <NoSuchPerson[at]bigfoot.com> writes:

- quote -

Are you sure? I know several people who work for MIT and
they swear up and down to me that they have a choice between
a 401(k) and a 403(b).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

It depends. Our State offers 401k and a public 457 to all
State employees. The State also makes its benefit plans
available to all public school teachers and public
universities. Those teachers and university people are also
eligible for 403b. So throughout our State we have folks
who are choosing between the three plans. Many use two of
the plans and save the max in each (one has to be the 457
for that to happen.)

The main difference, as I said before, lies in expenses and
funds offered. Of course, if there is an insurance company
in the mix there may be surrender charges and liquidity
issues. And the qualified plans (401k and 457) have
slightly different distribution rules (age 55 versus no age
restrictions for 457).

-HW "Skip" Weldon
Columbia, SC

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Ernie Klein wrote:
- quote -

No, I think you understand. You don't get to choose. If
you're employed by a non-profit, they will only offer a 403b
and not a 401k. Working for a for-profit company? Vice
versa.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

It turns out that for the first year she is the 403 B unless
she opts out. At the beginning of the second year, she can
open a 401 K, but it appears that this option is only for
those who opt ou of the 403 B.

Dick

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote:
- quote -

I agree that this really isn't a tax matter but I think I
must be missing something very basic here.

I didn't think that you got to pick and choose between a
401K or a 403B plan. I thought the difference was that
only non-profits could even offer a 403B. My daughter,
who works for a hospital, can only have a 403B.

Are there circumstances where one can choose or did I not
understand the question?

--
-Ernie-

Moderator:
The employee handbook gave her the choice and her
employer will fund it by matching up to 3% of her
salary based on her contribution either way.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Saving for retirement is not a tax matter - it's a savings
and investment matter. And that's where you will see
differences between plans... in the investments offered.
Assuming that the contribution and matching provisions are
similar, pay close attention to costs and the quality of
investment funds available in each.

-HW "Skip" Weldon
Columbia, SC

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Dick Adams <rdadams[at]smart.net> wrote:

- quote -

The CCH Master Tax Guide (2007) has information about both.
It talks about 401k's in ¶2111 and 403b's in ¶2167.

Stu

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Harlan Lunsford wrote:
- quote -

(snipped....)

- quote -

(grin!) I knew about that, Dick!
But if she were reading over your shoulder, I hope I made
her day.

C$$$$,
HL

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Dick Adams wrote:

- quote -

For an 18 year old just starting out, I would recommend she
go with private enterprise (all other things being equal),
for a 401k plan will offer more investment choices than a
403b plan in the public sector. Many, well, most, of them
allow the participant to allocate investments into
high/medium/low risk sectors.

ChEAr$$$$,
Harlan Lunsford, EA n LA

Moderator:
If you ask my sons "How old is your mother?", they were
taught to answer "I don't know, but she looks 23."

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

rdadams[at]smart.net (Dick=A0Adams) posted:

- quote -

Basically, both are deferred compensation retirement plans.
The only difference I know of is that the 401(k) is offered
by companies and corporations in the private sector. The
403(b) is the same thing, when offered for employees of
public schools or other non-profit employees.

Here's what a search turned up at http://www.irs.gov :

Publication 571 (4/2007), Tax-Sheltered Annuity Plans
(403(b) Plans) For Employees of Public Schools and Certain
Tax-Exempt Organizations Revised ...
http://www.irs.gov/publications/p571/index.htm

Hope this helps.

Bill

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

~Dick Adams <rdadams[at]smart.netwrote:

- quote -

The numbers refer to the section of the IRC that permits the
plan.

403B plans are offered by tax-exempt employers while 401K
plans are offered by employers subject to federal income
tax. Otherwise, they're basically the same. Many
non-profit organizations have their 403B plans administered
by TIAA-CREF, especially educational institutions, and that
plan adminstrator seems to have an old-fashioned leaning
towards offering participants annuities. However, as long as
the employer participates in a range of options for their
employees, you usually have the choice of mutual funds or
income funds or growth funds just as you would in a 401K.
Of course, your 403B plan will NEVER have the option of
buying your own employer's stock, since no one with publicly
traded stock would be offering a 403B.

-Crystal

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Dick Adams <rdad...[at]smart.net> wrote:

- quote -

I'm a participant in a 403(b). It acts almost exactly like a
401(k) for employees of nonprofits, educational
institutions, and (I believe) some ministers. The employer
sponsors the plan. Contributions are made by payroll
deduction with pre-tax dollars. Tax on gains is deferred
until withdrawal. My nonprofit employer does not match
contributions, but it's because the employer fully funds a
traditional defined-benefit pension plan.

I thought employers offered either one or the other, based
on their profit/nonprofit status. Is there an employer out
there sponsoring both a 401(k) and a 403(b) and letting
employees choose?

Cynthia in Chicago

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

This young girl who lives with me thinks I know more than I
do. She is starting a new job this month and wants to know
the advantages and disadvantages of a 401K versus a 403B.

I am clueless as to where to start looking og what the basic
differences are.

Dick

<< ------------------------------------------------------- > << The above is intended for educational purposes only. > << It does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer, for the purpose of > << the purpose of avoiding penalties that may be imposed > << upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >