MONEY MATTERS: 403 B Account
A 403 ? account, what is it?
403 B sometimes referred to as a tax shelter annuity. It's the equivalent of a 401k for the private sector. It's for churches, schools, not for profit. They work very, very similar. They're both defined contribution plans. You set up an account they withhold from your paycheck an amount you put into the account. It grows tax deferred and it will be taxed when it comes out. In some places the school will match but in most cases its employee money. Really it's real similar to a 401k other then it's for public employees, school teachers, churches, religious organizations.
What happens if you as a worker leave the employer and go somewhere else? What happens to that account?
The rules are very near the same as a 401k. You have the option to leave it there, or you can take it and transfer it into, say you go to another school you can transfer it into that 403b or you can transfer it into an IRA.
This is something you recommend people take advantage of if they're working for a private company?
Absolutely, public employer absolutely. The amount you can put in is 18,000 just like a 401k and if for example you taught for 15 years and put in 21, 000 and if you're over 50 there's a catch up another 6,000. Absolutely, if they get the opportunity to use it I recommend it.