What Is a 401(k), 403(b),401(a) or 457(b)?
A 401(k) and a 403(b) are employer-sponsored retirement savings plans 401(k)s in the private sector, and 403(b)s typically for public school, nonprofit, and certain religious employees. A 401(a) is a defined-contribution retirement plan funded primarily by employer contributions, often used by government or nonprofit employers, and may require mandatory employee contributions. Meanwhile, a 457(b) is a deferred-compensation plan available to state and local government employees or nonprofits, offering similar contribution flexibility to a 401(k), but lacking the 10% early withdrawal penalty when you leave the job.
Together, these plans provide multiple avenues for building retirement security, each with their own rules, tax treatment, and benefits.
Key Benefits & Basics
A 401(a) is a defined-contribution retirement plan funded primarily by employer contributions, often used by government or nonprofit employers, and may require mandatory employee contributions. Meanwhile, a 457(b) is a deferred-compensation plan available to state and local government employees or nonprofits, offering similar contribution flexibility to a 401(k), but lacking the 10% early withdrawal penalty when you leave the job.
Tax advantages
Contributions may be pre-tax (reducing taxable income now) or Roth (tax-free growth).
Employer contributions
401(a), 401(k), and 403(b) plans often include employer contributions—sometimes mandatory, sometimes matching.
Penalty-free withdrawals
457(b)s are unique in that distributions upon service separation are not subject to the standard 10% early withdrawal penalty.
Automatic savings
Payroll deductions make saving consistent and effortless.
Contribution Limits (2025)
For 2025, the IRS has set the following annual elective-deferral limits, which apply across 401(k), 403(b), and 457(b) plans: