What Is a 403(b) — and Do You Have One?

Last Updated: July 30, 2026

If you spent your career in a classroom, a hospital, a nonprofit, or a house of worship, you very likely have a 403(b) — and if you are 50 or older, understanding exactly how it works has never mattered more. The decisions you make about your 403(b) in the years leading up to retirement can meaningfully shape what your income looks like once you stop working.

A 403(b) is a tax-deferred retirement savings plan — meaning you pay taxes on the money later, in retirement, rather than now — built specifically for employees of public schools, colleges and universities, nonprofit organizations that qualify under IRS Section 501(c)(3), and certain religious organizations. Think of it as the nonprofit and public-sector version of the 401(k): same core concept, same tax advantages, structured for the sector where you built your career.

Here is how the basics work: money is withheld from your paycheck before taxes and deposited into your 403(b) account. That reduces your taxable income today. The money then grows without being taxed year after year — and you pay taxes only when you take money out, typically in retirement when many people are in a lower tax bracket.¹

For people in their 50s and 60s, the 403(b) also comes with some significant contribution advantages that younger workers do not have — including higher limits and a special catch-up provision for those who have stayed with the same employer for 15 or more years. We will cover all of that in Lesson 2.

In this class, we will look at what a 403(b) is, who is eligible, and how to confirm whether you are already enrolled — or whether you should be contributing more.

SOURCES

1. "IRC 403(b) Tax-Sheltered Annuity Plans." Internal Revenue Service. irs.gov/retirement-plans/irc-403b-tax-sheltered-annuity-plans. Accessed July 2026.