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The 401(k) and 403(b) are both tax-advantaged retirement accounts named after different sections of the tax code. While similar in many ways, 403(b)s are offered only to public school employees, certain ministers, and employees of tax-exempt organizations, while 401(k)s are available to employees of for-profit companies.
Here's a closer look at the key similarities and differences between the two retirement accounts.
Some of the key differences between 401(k)s and 403(b)s are:
Here are some of the key features 401(k)s and 403(b)s have in common:
A 401(k) isn't necessarily better or worse than a 403(b). Each account has its pros and cons, but many of its core features are the same. You likely won't get a choice between the two plans since your employer will probably offer only one.
In rare cases, you may have the opportunity to contribute to both plans at the same time. If so, you can choose to contribute more to the one you believe will offer you the better deal. For example, you may prefer a 401(k) if it includes a company match and your 403(b) doesn't. You might prefer a 403(b) if you've been with your company for at least 15 years and want to take advantage of extra catch-up contributions.
Weigh all the key differences listed above to decide which plan is right for you. Remember that your annual contribution limit applies to money you put in both accounts, so if you are contributing to a 401(k) and a 403(b) at the same time, you're allowed only up to $24,500 in combined contributions to both, or $32,000 if you're 50 or older, in 2026. If you're between the ages of 60 and 63, your maximum contribution is $35,750 in 2026. If you run into any questions about your plan, reach out to your plan administrator for more information.
