What type of retirement plan is specifically designed for employees of non-profit organizations?

The 403(b) Plan is a retirement plan specifically designed for employees of non-profit organizations, such as schools, hospitals, and charitable organizations. This plan allows employees to contribute a portion of their salary on a tax-deferred basis, similar to a 401(k) plan, but it is specifically intended for those working in the non-profit sector.

The distinct benefit of a 403(b) plan lies in its focus on the unique needs of employees in public education and non-profit organizations, offering features and tax advantages that cater to their employment structure. Contributions to a 403(b) plan can come from employees, and in some cases, employers may also make contributions.

In essence, this plan helps non-profit employees save for retirement while enjoying tax benefits, and it has provisions that align well with the missions and budgets of non-profit organizations.