403(b) Retirement plans

  1. I was wondering if anyone is familiar with this particular plan? I think it is like a 401k. I really need to get something going about retirement and was just curious if anyone had any advice on this topic.

  2. 4 Comments

  3. by   Tweety
    It's pretty much the same as a 401K, except it indicates that you are working for a not-for-profit, but that doesn't mean much to you personally I don't think.

    They are so different it depends on the administrator of the plan. Ours is run by AetnaING (sp?). We get to choose from about 24 mutual funds plans, a money market, bonds, and a fixed income.

    I was in some aggressive mutual funds and made tons of money in the late 90s only to to see them seriously eroded during the downturn in the economy.

    Be very careful in what you choose right now. I had some funds whose returns were NEGATIVE 25 to 30%. The good thing about our funds is we can change them online. I finally got tired of throwing my money away and it's all in fixed income now, just like a regular saving account (geting about 5%) (also have a little invested in bonds, but very little) and I'll wait out the bad times.

    This is the only way I can save money, as I indicated in another thread.

    The good thing too is that it is not taxed. They take out our contribution, then tax what income is left, which is lowers the tax bracket, so they say. But being taxed as a single no kids guy I can't tell. The theory is when you retire, you income is much lower so it won't be taxed as much.

    I recommend it. Good luck.
    Last edit by Tweety on Mar 31, '03
  4. by   cmggriff
    403b is the 401k for nonprofit corporations such as most hospitals. Look into your particular plan to find out if your hospital matches any part of your contribution. The hospital I work for now contributes .5% up to 10% of my contributions. So I have an instant return on my money of 5%. The money comes out pretax and the money is tax free until I begin to withdraw it, so my tax savings are around another 5% I think.

    You also need to check into when the money is vested. Mine is vested from day 1. Some plans have a waiting period for vestiture of up to 10 years. The money you put in is always yours, but any matching from your employer may be removed if you leave cmployment with that entity.

    Where you put your money may also be up to you in some plans. AS 3rd shift guy says, some plans allow you to pick funds of different types but usually from the same company. Don't invest according to past performance of the fund. Determine the level of risk vs. return you are comfortable with and invest accordingly. There are a lot of online resources that can help you decide, but I recommend The Motley Fool at www.fool.com. It's free and very very forthright. Good luck, Gary
  5. by   Hardknox
    Started our plan in 1982. Couldn't have retired if I hadn't done it. Youll never miss the $ if you don't see it. Go for the max.
  6. by   NurseGirlKaren
    And the younger you start contributing, the better! The advice I was given was to contribute as much as will max out what your employer contributes (I know that doesn't make any sense).