Tax Sheltered Annuities FAQs
What is the difference between a 403(b) and a 457(b) plan?
A 403(b) Plan is offered through insurance companies.
A 457(b) Plan is offered through New York State and is for State workers. With a 457(b) plan, you can withdraw the money you saved in this account without a penalty at any age but you do have to pay income taxes at that point.
Also, you may have to pay more for an independent agent to administer a 403(b) plan, and a 457(b) plan is a state plan.
Why would I want either of these plans?
These plans are optional but both are great saving tools for retirement because the money deducted from your pay and put in these accounts are pre-tax, so they lower your taxable income. The money is only taxed when it is taken out of the account and by that time, you should be in a lower tax bracket (in retirement).