403(b) plans are retirement savings plans offered by public schools, tax-exempt organizations, and certain other employers. Employees can contribute a portion of their salary to a 403(b) plan on a pre-tax basis, reducing their current taxable income. The money in a 403(b) plan grows tax-deferred until it is withdrawn in retirement. In 2023, the annual contribution limit for 403(b) plans is $22,500. This limit is scheduled to increase to $23,500 in 2024 and $24,500 in 2025.
403(b) plans offer a number of benefits, including tax-deferred growth, potential employer matching contributions and the ability to make catch-up contributions if you are age 50 or older. 403(b) plans are a valuable retirement savings tool, and the contribution limits are increasing in the coming years. If you are eligible to participate in a 403(b) plan, you should consider taking advantage of this opportunity to save for your retirement.
