Investment Choices
Many 403(b) plans offer a limited menu of investments. Some are built primarily around annuity products.
For Educators and Nonprofit Employees
403(b) Tax-Sheltered Annuity Overview
A 403(b) plan, also known as a tax-sheltered annuity plan (TSA), lets eligible employees set aside a portion of salary into individual accounts. These plans are offered by public schools and certain tax-exempt organizations, such as churches and nonprofits. Meet in Hauppauge or by video through Atlas VirtualWealth.
With a 403(b), you can contribute pre-tax or after-tax (Roth) dollars directly from your paycheck. Employers may also contribute. Pre-tax contributions lower your taxable income in the year you make them. The money then grows tax-deferred until you withdraw it in retirement.
Some plans also offer Roth 403(b) accounts. With Roth contributions you pay taxes now, but qualified withdrawals, including earnings, are tax-free in retirement. Atlas Benefits Advisor explains your options in plain language so you can decide what fits.
2026 Contribution Limits
Elective deferral limit$24,500
Age 50+ catch-up+ $8,000
Ages 60–63 enhanced catch-up (if plan allows)+ $11,250
Overall annual additions (employee + employer)$72,000
Long-tenured employees (15+ years with the same eligible employer) may also have access to a special 15-year catch-up of up to $3,000 per year (lifetime maximum $15,000), if the plan permits it. Confirm current IRS and plan figures before you act.
Important Considerations
403(b) plans offer meaningful tax advantages and relatively high contribution limits. At the same time, several practical points are worth understanding:
Fees
Certain 403(b) options, especially variable annuities, can carry higher ongoing fees. Over time those costs could reduce what you keep.
Early Withdrawals
Withdrawals before age 59½ are generally subject to ordinary income tax plus a 10% additional tax penalty.
Related Guidance for Educators
Complimentary 403(b) Checkup
A short review of fees, expense ratios, and next steps.
How 457(b) Plans Work
Another savings option many Long Island districts offer.
Teachers’ Retirement Pension Options
How the pension check sits beside supplemental savings.
Teachers, K-12, & School Employee Benefits
The broader benefits picture for educators.
Frequently Asked Questions
What is a 403(b) plan?
A 403(b) plan, also known as a tax-sheltered annuity plan (TSA), is a retirement savings plan that allows eligible employees of public schools and certain tax-exempt organizations to set aside a portion of their salary into individual accounts.
What is the difference between a traditional 403(b) and a Roth 403(b)?
Pre-tax 403(b) contributions lower your taxable income in the year you make them and grow tax-deferred until withdrawal. Roth 403(b) contributions are made with after-tax dollars, and qualified withdrawals, including earnings, are tax-free in retirement.
What are the 2026 403(b) contribution limits?
For 2026, the elective deferral limit is $24,500. The age 50+ catch-up is an additional $8,000. If the plan allows it, the ages 60–63 enhanced catch-up is an additional $11,250. The overall annual additions limit (employee + employer) is $72,000. A special 15-year catch-up of up to $3,000 per year (lifetime maximum $15,000) may also apply if the plan permits it. Confirm current figures with official IRS and plan documents.
Why do 403(b) fees matter?
Certain 403(b) options, especially variable annuities, can carry higher ongoing fees. Over time those costs can reduce what you keep. A complimentary checkup can help you learn the fees and investment menu in your plan.
Ready for Clarity on Your 403(b)?
Book a complimentary 10-minute checkup or an Atlas VirtualWealth session. No obligation. No sales pressure.
Atlas Benefits Advisor
Christopher J. Vargas, LUTCF®
President & Chief Benefits Strategist
410 Motor Parkway, 2nd Floor, Hauppauge, NY 11788
Call: (631) 389-2358 (voice only) · Text: (631) 904-0901
cvargas@atlasbenefitsadvisor.com
admin@atlasbenefitsadvisor.com
Hours: Monday to Friday, 9:00 a.m. to 5:00 p.m.; Saturday by appointment only
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