What is a 403(b) and is it for me?

What is a 403(b) Plan:

A 403(b) plan is a retirement account specifically for public school employees and other tax-exempt organizations. Participants include teachers, school administrators, professors, government employees, nurses, doctors, and librarians. 403(b) plans are very similar to a typical 401(k) plan, but are not for the private sector.

The major advantage of a 403(b) plan is that your contributions are tax-deferred. This means that your contributions continue to grow tax free until you decide to begin withdrawing.

When it comes to withdrawing money from a 403(b) you have to be careful because of taxes. If you are at least 59 and 1/2 years of age you are then able to begin taking contributions from it. If you are under 59 and 1/2 and you need to withdrawal money from you 403)b) account, there is a mandatory 10% tax penalty on the amount you take out.