Encyclopedia of Investment Terminology

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403b Plan

A 403(b) plan, which is also known as a tax-sheltered annuity plan or TSA, is a type of retirement plan used by those who work in tax-exempt businesses, including schools and universities. This type of plan works like a 401(k) plan in that money for retirement is saved before income tax is due and cannot be withdrawn until retirement age is reached. Deposit limits similar to what works with a 401(k) plan are used as well. There is no taxation until it is withdrawn.

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