What's the difference between a 401 and a 403b?

Question

I should know this stuff but don't. My daughter asked me but I can't answer her question. Tell me the pros and cons, too. Thanks!

Answer 1

Other defined contribution plans include 403(b)s (similar to 401(k)s, however, these are only used by non-profit orgainzations), 457 plans (available to state and municipal empoyees and similar to 401(k)s and 403(b)s, however these allow larger catch-up adjustments), and SIMPLEs (Savings Incentive Match Plans for Employees for organizations with less than 100 employees).

Some employers do not offer any of the above, in which many people choose to “create their own” by using IRAs (individual retirement accounts).

Answer 2

A 403b is for employees in like government jobs, local and national, also if they are employed by a non-profit.  The 401k's are for the rest of the employers.

The pros for both is that it is a retirement plan, it just depends on who you work for as to which one is for you.