Life · Chapter 9 · Uses & Suitability
Tax-Sheltered Annuity — 403(b) / 501(c)(3)
Definition
A qualified annuity plan reserved for employees of non-profit charitable, educational, and religious organizations (public schools, churches, etc.). Contributions — employer-paid or via salary reduction — are excluded from current taxable income; retirement payouts are taxed as ordinary income (usually at a lower post-retirement bracket).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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