Glossary
403(b)
A 403(b) is a retirement plan similar to a 401(k) but offered by public schools, certain nonprofits, and churches, letting employees defer salary into tax-advantaged investments.
Contribution limits generally track 401(k) limits, and both traditional and Roth versions exist. Historically many 403(b) menus were dominated by annuity products sold by insurance companies, and some school-district menus still carry higher-cost options alongside lower-cost mutual funds.
Why it matters in practice
Because 403(b) vendor lists can include products with very different fee levels, the choice of vendor and product inside the plan often matters as much as the decision to contribute. Comparing expense ratios and surrender charges before enrolling can meaningfully change long-term results.
In California
California public school and community college employees typically have a 403(b) available alongside their CalSTRS or CalPERS pension, with vendors listed on the state's 403bCompare registry — a useful place to check fees before choosing.
Related terms: 401(k) · 457(b) · CalSTRS · Annuity · Pension