Should I open a 401k or a 403b?

Question

I am a teacher looking to start investing for my retirement. Which would be better to invest in? What is the main difference? I'm pretty sure one of them is taken out before taxes and one is not taken before taxes and you pay when you withdraw. Any info would be great, I know nothing about retirement accounts.Thanks!

Answer 1

you are thinking of the Roth IRA and the regular IRA

Roth IRA is money that you are investing post-tax

regular IRA is money is being invested Pre-tax

401K and 403b are investment vehicals though your enployer.  401K though for profit entities. 403b are non-profit entities such as school.

Answer 2

wat da h**l u talkin bout >.<

Answer 3

school districts don't typically offer a 401k.  But if you do have the choice then go with the 401k over the 403b.  Main difference is that the 401k is a group trust account and the 403b is individual account.  Thus the 403b's are individually marketed and the volume of the accounts are lower....thus making them more expensive to own....ie the fees are higher.  You probably have a 401(a) plan...deferred compensation plan...that you can contribute a percentage of your pay to.  I'd put max that out before I'd put any in a 403b.  Problem with that one is that the 403b you can change the percentages that you are contributing...but with the deferred compensation plan you can only change it annually (at most) with some plans/districts locking you in for years.   So  you'd better be thinking long term with your choice.

Answer 4

If you're a teacher, you should go with the 403(b). The district probably doesn't make a 401(k) plan available. Both 401k and 403b are taken out before tax.