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What is the difference between a 401k, a 403b and a 457b?
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A 401(k) is an employer-sponsored retirement savings plan that allows workers to save for retirement. It can be funded with pre-tax salary deferrals from the employee's paycheck. Contributions are usually made on a pre-tax basis, meaning they are not subject to income tax until they are withdrawn. A 403(b) is similar to a 401(k), but it is offered by nonprofits or educational institutions. Contributions are often matched by employers, making them more attractive than 401(k)s. A 457(b) is another type of retirement plan available to certain public employees. Unlike 401(k)s and 403(b)s, contributions to a 457(b) are made with after-tax dollars.