Terms of Use
A 403(b) plan, or Tax-Sheltered Annuity (TSA), is a retirement savings vehicle for employees of public schools, hospitals, and 501(c)(3) tax-exempt organizations. Much like a 401(k), it allows you to build a nest egg through convenient payroll deductions.
2026 Contribution Limits
The IRS has increased the elective deferral limits for the 2026 tax year. You can choose to contribute on a Pre-Tax basis (reducing current taxable income) or a Roth basis (tax-free withdrawals in retirement).
| Category |
2026 Limit |
| Standard Deferral (Under age 50) |
$24,500 |
| Age 50+ Catch-Up |
$32,500 (Total) |
| "Super" Catch-Up (Ages 60–63) |
$35,750 (Total) |
New High-Earner Mandate:
Starting in 2026, if your 2025 wages exceeded $150,000, the IRS requires that any catch-up contributions (for age 50+) be made to a Roth account. You will no longer receive a pre-tax deduction for catch-up amounts if you meet this income threshold.
The 15-Year Service Rule
Unique to the 403(b) is the "Lifetime Catch-Up." If you have worked for the same qualified organization for 15 years or more, you may be eligible to contribute an additional $3,000 per year (up to a $15,000 lifetime maximum), depending on your previous contribution history. This is in addition to the standard age-based catch-ups.
Key Benefits
- Tax-Deferred Growth: Your investment earnings compound without being taxed annually.
- Employer Matching: Many non-profits offer matching contributions, which is essentially "free money" toward your retirement.
- Portability: If you change employers within the non-profit or public sector, you can often roll your balance into your new employer's plan or an IRA.
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