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RMD required
403(b) Plan
A 403(b) is a tax-deferred retirement plan for employees of public schools, certain nonprofits, hospitals, and ministers. It works similarly to a 401(k) but under a different section of the tax code.
Who might have one?
- Teachers and school district employees
- Hospital and healthcare workers at nonprofit systems
- Employees of 501(c)(3) charitable organizations
- Some ministers and religious organization staff
Why would you have one?
- Your employer offers it as the primary retirement benefit
- Pre-tax payroll contributions reduce current taxable income
- Access to annuities and mutual funds selected by the plan
- Build retirement savings with potential employer contributions
How RMDs work for this account
403(b) plans follow the same general RMD rules as 401(k)s. RMDs are calculated per plan and must be taken from that plan. The still-working exception may apply if you remain employed by the sponsoring organization.
Common mistakes
- Confusing 403(b) with an IRA and trying to aggregate withdrawals
- Holding multiple 403(b) accounts from different employers and missing one plan's RMD
- Not updating beneficiary designations after major life events
Frequently asked questions
- Do 403(b) accounts require RMDs?
- Yes. Required minimum distributions generally begin at age 73 or 75, with per-plan calculation and withdrawal rules similar to 401(k)s.
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