Author Topic: Is this a true statement? 401K is to IRA as 403b is to Roth  (Read 2072 times)

boulder3381

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Is this a true statement? 401K is to IRA as 403b is to Roth
« on: April 15, 2015, 01:55:32 PM »
Hello


I"m starting a new job with matching 403b option in 12 months.  I'm trying to make sense of it.  As I've been self employed for past five years never had matching anything!  My search of MMM forum came up null for 403b


Is this a true statement?  401K is to IRA as 403b is to Roth


Are there penalties for taking money out early of a 403b if you retire before 65 (which is my plan).


Casey
« Last Edit: April 15, 2015, 01:57:51 PM by boulder3381 »

James!

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #1 on: April 15, 2015, 02:02:34 PM »
No, that statement is not true. I could explain it, but I'll say that there are very good explanations for all of these if you do a little more googling. I'd encourage you to try, because you'll find some great info along the way.

For a brief brief summary:

401k (either roth or traditional) and 403b are employee sponsored retirement plans. 401k and 403b are similar (maybe even exactly the same) except 403b are only offered to certain types of (public?) employees.

IRA is an individual retirement account, not through an employer.

Roth vs Traditional there are 10 million threads here and elsewhere to explain the differences and the pros and cons.

Good luck!


There is a boatload of great info here and elsewhere if you are up for the search.

Cheers,
James

dandarc

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #2 on: April 15, 2015, 02:05:54 PM »
James nailed it. 

Also not sure where you are getting age 65 from regarding any of these accounts.  There are penalties for withdrawing prior to age 59.5, but there are well-known ways to avoid those penalties.

boulder3381

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #3 on: April 15, 2015, 02:07:46 PM »

For a brief brief summary:

401k (either roth or traditional) and 403b are employee sponsored retirement plans. 401k and 403b are similar (maybe even exactly the same) except 403b are only offered to certain types of (public?) employees.



Thanks.  I'll return to google.  first three articles were too elementary.


I've had IRA vs Roth dialed in since I was twelve.  I've had them each since I was 15 (just killed traditional with first time home purchase).




I'm a red panda

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #4 on: April 15, 2015, 02:17:19 PM »
As far as I can tell, 401k and 403b are essentially the same to the employee. 

James!

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #5 on: April 15, 2015, 02:32:00 PM »

For a brief brief summary:

401k (either roth or traditional) and 403b are employee sponsored retirement plans. 401k and 403b are similar (maybe even exactly the same) except 403b are only offered to certain types of (public?) employees.



Thanks.  I'll return to google.  first three articles were too elementary.


I've had IRA vs Roth dialed in since I was twelve.  I've had them each since I was 15 (just killed traditional with first time home purchase).

That's amazing that you've had them so long and too bad that you don't have the IRA anymore.

terran

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #6 on: April 15, 2015, 02:59:18 PM »
As far as I can tell, 401k and 403b are essentially the same to the employee.

401(k)'s and 403(b)'s are basically the same thing. 403(b)'s seem to be more prevalent in the non-profit world, and that's probably the technical difference, but as the employee it really doesn't matter. Both can be traditional or roth.

boulder3381

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Re: Is this a true statement? 401K is to IRA as 403b is to Roth
« Reply #7 on: April 15, 2015, 03:59:14 PM »

@terran  thanks for these clarification

As far as I can tell, 401k and 403b are essentially the same to the employee.


401(k)'s and 403(b)'s are basically the same thing. 403(b)'s seem to be more prevalent in the non-profit world, and that's probably the technical difference, but as the employee it really doesn't matter. Both can be traditional or roth.



@James!  well, I'd rather have a house than an IRA. Trade-offs.


Casey