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What's the difference between the 401k, the 403b, the 457, and the IRA?
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The main differences between the different types of retirement plans are the eligibility requirements, contribution limits, tax treatment, and investment options. 401(k)s, 403(b)s, and IRAs are all employer-sponsored retirement plans that offer employees a way to save for retirement. A 401(k) is typically offered by employers who have a 401(k) plan with an Internal Revenue Service (IRS)-approved pension provider; a 403(b) is similar but can be offered by nonprofits; and an IRA is funded solely by the employee and may not require any employer contributions. Contributions to these plans are made on a pre-tax basis and are subject to certain limitations, depending on which type of plan you choose. With a 401(k), your contributions will be taxed when they are withdrawn in retirement; with a 403(b), you may pay taxes now or later; and with an IRA, no taxes are due until you withdraw the money.