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Definition: This is much like a 401(k) plan in that it's a retirement account that allows you to make salary contributions. The difference is that 403(b) plans are typically for people who are members of public organizations (schools), church organizations, or other non-profits.
One downside: Like 401(k) plans, these are directed by the organization you work for, so you are not given quite as many investment possibilities. Most organizations will either hire and outside professional to manage the 403(b) plans or they will contract with a mutual fund company to give you a small, core group of mutual funds to choose from.
TeenAnalyst advice: Because of the match most organizations make (50-100% match), it's in your best interest to utilize your 403(b) plan. However, because 403(b) plans limit the amount you can contribute, we also recommend opening up another investment account as well.
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