403(b) Retirement plans

Let our high-quality mutual funds and easy-to-manage plan help you achieve retirement success.

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Call 800-569-4903
Monday through Friday, 8 a.m. to 8 p.m., Eastern time

Call 800-569-4903
Monday through Friday, 8 a.m. to 8 p.m., Eastern time

What exactly is a 403(b) plan?

You could say that the 403(b) plan is a close relative of the more familiar 401(k) retirement savings plan. Both plan types offer tax-deferred growth. The major difference is the types of businesses that offer them.

  • 401(k) plans are generally available to employees of for-profit companies.
  • 403(b) plans are generally offered by public education institutions and certain tax-exempt organizations.

Saving in a 403(b) plan is a smart thing to do

A 403(b) plan can be an excellent way to help build retirement security—whether it's your only option for retirement saving, or it's supplementing another retirement account.

403(b) plans have high contribution limits and diversified investment choices.

You're in control. You choose where your money goes and how much you'll contribute ($23,500 for 2025). You'll also have options for how to withdraw your money in retirement.

And if your employer contributes to your plan, your savings get an extra boost!

401(k) plan

A type of employer-sponsored retirement savings plan that allows employees to contribute pre-tax dollars by deferring salary. Many plans offer a variety of investment options, and employers often match a percentage of employee contributions.

Tax deferral

Delaying the payment of income taxes on income. For example, owners of traditional IRAs do not pay income taxes on the interest, dividends, or capital gains accumulating in their retirement accounts until they begin making withdrawals.

Contribution

Money placed in a retirement plan, such as a 403(b), IRA (individual retirement account), 401(k), or other retirement plan for a particular tax year. Contributions may be deductible or nondeductible, depending on the account type.

Diversification

The strategy of investing in multiple asset classes (like stocks, bonds, and cash) and among many securities in an attempt to lower overall investment risk.

Roth

A feature of a 403(b) plan that allows you to make after-tax contributions (so you don't get an immediate tax deduction) and then withdraw money in retirement tax-free as long as you meet the requirements.

Pre-tax contribution

An addition to an account made with funds from an employee's paycheck before federal income taxes are deducted.

Earnings

The investment returns you accumulate on the savings in your account.

Compounding

When earnings on invested money generate their own earnings. For example, if you invested $5,000 and earned 6% a year, in the first year you'd earn $300 ($5,000 x 0.06), in the second year you'd earn $318 ($5,300 x 0.06), in the third year you'd earn $337.08 ($5,618 x 0.06), and so on. Over longer periods of time, compounding becomes very powerful. In this example, you'd earn over $1,600 in the 30th year.

Interest

Income you can receive by investing in bonds or cash investments. The investment's interest rate is specified when the investment is issued.

Dividend

The distribution of the interest or income produced by a mutual fund's holdings to the fund's shareholders, or a payment of cash or stock from a company's earnings to each stockholder. Dividends can be distributed monthly, quarterly, semiannually, or annually.

Capital gains

Payments to mutual fund shareholders of gains realized during the year on securities that a fund has sold at a profit minus any realized losses. Capital gains can be distributed monthly, quarterly, semiannually, or annually.

Mutual fund

A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.

You may benefit from tax breaks

Like all retirement plans, 403(b) plans offer tax advantages—enabling you to save on taxes now and in some cases later, if your plan offers a Roth option.

Save on taxes now

Contributions are pre-tax, which allows you to postpone your tax bill while you put away money for retirement. Meanwhile, your earnings can continue to grow tax-free until you begin making withdrawals. By then, you may be in a lower tax bracket.*

Save on taxes later

If your plan offers a Roth contribution, your contributions are taxable now, but you get a future bonus—in addition to tax-free growth, you get tax-free withdrawals as long as you've owned your account for 5 years and you're age 59½ or older.

Time is on your side

The passing years also bring the benefit of compounding. Any interest, dividends, and capital gains your account accumulates generate earnings on top of earnings. In other words, your money makes money!

Learn about risk, reward & time

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What plan sponsors need to know

Vanguard 403(b) Services provides premier recordkeeping, easy plan management, and day-to-day support from an assigned client services team in partnership with Newport Group.**

Find out more about Vanguard 403(b) Services for plan sponsors

What plan participants need to know

You can build for your future today with low-cost funds and dedicated support through Vanguard 403(b) Services.

Find out more about Vanguard 403(b) Services for plan participants

Costs matter

Benjamin Franklin famously said: "A penny saved is a penny earned." Vanguard is living proof. Our low fund costs and straightforward 403(b) fees can help you keep more of your earnings in your pocket—where they belong.

Lower your 403(b) plan fees & fund costs at Vanguard

Why choose Vanguard?

Our track record of reliable 403(b) plan management; high-quality, low-cost mutual funds; and convenient account services makes Vanguard the smart choice for employers who want to help employees save for retirement and for employees seeking a trustworthy partner to help them reach their goals.

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You're putting money away for your future, but how do you know if it will be enough?

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If you don't know how to start saving for retirement, we can help you figure out how much you'll need and how to balance all your savings goals.

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Consolidate your accounts

Consider moving accounts you hold elsewhere to Vanguard. You'll enjoy more control of your portfolio now and get a clear picture of your investment strategy.

Transfer accounts to Vanguard

We're here to help

Existing plan sponsors

Call 877-893-5426

Prospective plan sponsors

Call 877-859-5756

Plan participants

Call 800-569-4903

Monday through Friday
8 a.m. to 8 p.m., Eastern time

Already a plan participant? Log in to access your account.

Log in

New to Vanguard? Get started >

We're here to help

Plan participants

Call 800-569-4903

Existing plan sponsors

Call 877-893-5426

Prospective plan sponsors

Call 877-859-5756

Monday through Friday
8 a.m. to 8 p.m., Eastern time

Already a plan participant?
Log in to access your account.

Log in

New to Vanguard? Get started >

*Withdrawals taken before age 59½ may be subject to ordinary income tax plus a 10% federal penalty tax.

**Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (VGI). VGI has entered into an agreement with Newport Group, Inc., to provide certain plan recordkeeping and administrative services on its behalf. Custodial services are provided by Newport Trust Company, a wholly owned subsidiary of Newport Group, Inc. Newport Group, Inc., and Newport Trust Company are not affiliated with The Vanguard Group, Inc., or any of its affiliates.

All investing is subject to risk, including the possible loss of the money you invest.

Diversification does not ensure a profit or protect against a loss in a declining market.

For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.