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What is the difference between a 401(k) and a 403(b)?
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A 401(k) is a type of retirement savings plan that allows employees to save pre-tax money. Contributions are made with pre-tax dollars, meaning no taxes are due on the contributions when they are withdrawn in retirement. A 403(b) is similar, except it is offered through certain educational institutions such as colleges and universities. Contributions are also made with pre-tax dollars, but withdrawals are taxed at the employee's income tax rate.