Series 7 practice questionmediumRetirement Accounts — 403(b) Plans
A 403(b) plan is available to employees of which type of organization?
- AFor-profit corporations only
- BSelf-employed individuals exclusively
- CFederal government agencies only
- DPublic schools, tax-exempt organizations, and certain ministers✓ Correct answer
Explanation
Why D — Public schools, tax-exempt organizations, and certain ministers
403(b) plans, also known as tax-sheltered annuities (TSAs), are available to employees of public schools, tax-exempt organizations under Section 501(c)(3), and certain ministers. They function similarly to 401(k) plans, allowing pre-tax contributions and tax-deferred growth, but are restricted to these specific employer types.
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