ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Traditional IRA
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Roth IRA
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401(k)/403(b)/457
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None of the above
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Detailed explanation-1: -The main difference between a 403(b) and 401(k) is the type of employer who offers them. 401(k) plans are offered by private, for-profit companies. 403(b) plans, on the other hand, are offered by tax-exempt and nonprofit organizations.
Detailed explanation-2: -The limit on annual additions (the combination of all employer contributions and employee elective salary deferrals to all 403(b) accounts) generally is the lesser of: $66, 000 in 2022 ($58, 000 for 2021; $57, 000 for 2020), or. 100% of includible compensation for the employee’s most recent year of service.
Detailed explanation-3: -Key Takeaways. Both 403(b) plans and Roth IRAs allow you to save for retirement, but 403(b) plans are only offered through an employer, such as a nonprofit or a public school. A 403(b) plan is similar to a 401(k) in that it’s funded with pre-tax dollars and has a higher contribution limit than a Roth IRA.
Detailed explanation-4: -Can You Contribute to a 401(k) and 403(b) at the Same Time? You can contribute to both a 403(b) and a 401(k) if your employer offers both types of plans.