403(b) / TSA – Pros / Cons – Taxable vs. Tax Deferred vs. Nontaxable

Key Benefit ConceptsAbout Us, Actuarial

There are many different benefit vehicles available through employers for their employees depending on the type of entity. One specific benefit vehicle is a 403(b) or Tax-Sheltered Annuity (TSA). According to the Internal Revenue Service, a 403(b) or TSA plan is a retirement plan offered by public schools and certain charities and is similar to a 401(K) plan maintained by a for-profit entity. Just as with a 401(k) plan, a 403(b) plan lets employees defer some of their salary into individual accounts.

Of course, with any benefit vehicle there can be both advantages and disadvantages. Below is a table that outlines various features specific to a non-elective 403(b) plan; where an employer is making contributions to an employee’s account.