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Workplace Plans
Build Wealth While You Work With a 403(b) Plan
A 403(b) retirement savings plan is a powerful tool for growing retirement savings over time and building a secure future. Benefits include tax advantages, flexible investment options, and the potential for employer contributions.
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What Is a 403(b) Plan?
Sometimes compared to a 401(k) plan for those in the private sector, a 403(b) plan helps you build long-term financial security through flexible investment options and payroll deductions. 403(b) plans are often used to supplement other retirement income that may not provide enough for your retirement needs.
403(b) Retirement Plans: Getting Started
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Enrolling in a 403(b) Plan
You can enroll in a 403(b) plan online. Reach out to your local MissionSquare representative, or contact us for assistance.
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How a 403(b) Plan Works
You can contribute up to 100% of your annual compensation pre-tax (typically no more than $24,500 for 2026). Some employers also offer a matching contribution. These contributions may have a vesting schedule that determines when you own the money and interest, which could be paid when you separate from that employer.
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Investing in a 403(b) Plan
You can control your 403(b) investments by choosing options in your plan. These typically range from conservative stable-value investments to aggressive bond and stock funds. You can build a diversified portfolio, select a simple yet diversified target-date or target-risk fund, or reach out to your financial provider for advice.
Contributions, Eligibility, and Distribution
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Contributions
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The 403(b) maximum contribution for 2026 is $24,500 for normal contributions. For 403(b) catch-up amounts, see 403(b) contribution limits for the current calendar year.
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Eligibility Requirements
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A 403(b) plan is available to employees of public schools, religious organizations, and certain nonprofits. If a 403(b) is offered to one employee in a job class, it must be offered to all eligible employees in that class.
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Distribution Options
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Distribution options include standard withdrawals after age 59 1/2, Required Minimum Distributions starting at 73, and penalty-free rollovers to other qualified retirement accounts.
What Are the Benefits of a 403(b) Retirement Plan?
The key benefit of a 403(b) plan is that your earnings grow tax-free until you withdraw them. Other benefits include catch-up options, the ability to borrow or withdraw from your account, survivor benefits, and roll-in options.
Catch-Up Options
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If you’re age 50 and older, you’re eligible to save beyond the normal contribution limit. For 2026, you can save an additional $8,000. And, if you’re age 50 and older and have 15 or more years of service with an eligible employer, you can contribute up to an additional $3,000 per year, capped at a total of $15,000 across your lifetime. Participants aged 60, 61, 62, or 63 can contribute an amount in addition to the normal contribution limit (not the age-50 limit).*
Borrowing From Your 403(b)
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You may be able to borrow funds from your 403(b) plan for emergencies or major expenses and pay the money back over time. This loan amount can be up to 50% of your vested balance (or a maximum of $50,000). The repayment doesn’t count toward your annual contribution limit, so you can still save up to the maximum contribution limit.
Withdrawing From a 403(b)
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You can withdraw money from your account in lump sums, scheduled withdrawals, or annuitized income payments without penalty at age 59 1/2. You may also be able to withdraw money from your plan penalty-free for financial hardship or emergencies, like separation from service the year you turn 55 or total and permanent disability.
Survivor Benefits
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You can designate a beneficiary, or beneficiaries, to receive any remaining assets upon your death. Designating beneficiaries helps ensure your assets get paid per your wishes. If you’re married, most 403(b) plans require that your spouse be the beneficiary on at least 50% of your account, unless they sign a waiver.
Rollover Options
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If you change employers, you can roll over your 403(b) plan to another qualified plan or IRA tax-free if all conditions are met.
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Frequently Asked Questions
Can I contribute to both a 403(b) plan and a 457(b) plan?
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Yes. You can contribute the maximum allowable to your 403(b) plan and the maximum to a 457(b) plan at the same time, increasing your retirement savings potential.
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What if I leave my current job?
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If you leave your job, you can either leave the funds in your 403(b) plan or roll them over to an IRA or other qualified plan.
Can I inherit a 403(b) plan?
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Yes. If you’re the designated beneficiary of the original account holder and they pass away, you inherit the 403(b) plan and its assets. 403(b) beneficiary rules require a married person to designate their spouse to receive at least 50% of the plan’s balance. If you’re the spouse and sign a waiver, the account holder can designate the funds to various beneficiaries.
Have More Questions?
Call (800) 669-7400 to speak with a representative weekdays 8:30 a.m. to 9:00 p.m. ET.
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Financial Planning Services
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Access a range of services, including one-on-one consultations with a [small-caps]Certified Financial Planner[/small-caps]® professional, personalized financial goal plans, and webinars on topics such as Social Security, Medicare, and estate planning with your MissionSquare plan.
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Understanding Retirement Taxes
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Most distributions from your MissionSquare retirement accounts are subject to federal and possibly state and local income taxes. Planning for these expenses is essential to managing your investments.
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Roll-In Services
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Learn about rolling over funds from one retirement account to another. We make the process simple and can help you weigh your options to determine what works best for your long-term goals.
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457(b) vs. 403(b) Plans: Benefits & Differences
Learn about the differences between 457(b) and 403(b) retirement plans to see which is best for your needs. Plus learn about plans from MissionSquare.
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403(b) Roth Contribution Options
The Roth contribution option allows you to contribute after-tax dollars to your 403(b) retirement plan, which can later be withdrawn tax-free.
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403(b) Rollover Options
If you're no longer working for the employer that set up your 403(b) plan, you can elect to roll it over to a different account. Learn about rollover options.