The 403(b) and the 457(b) are plans that are both tax-deferred. Generally, a 403(b) plan is available to employees of educational institutions and a 457(b) is available to governmental employees. The IRS Internal Revenue Code allows educators to use both the 403(b) and 457(b) plans to prepare for retirement.\r\n\r\nGenerally speaking, 457(b) plans are easier to take money out once you\u2019ve retired. It\u2019s important, however, to compare your 403(b) and 457(b) plan options as some school districts have better investment options through the 457(b) plan or through the 403(b). Consider the fees and other options when deciding.\r\n\r\nAdditionally, the 457(b) plan is tax-deferred while employed by the governmental institution but when you leave you cannot roll the plan into an Individual Retirement Account (IRA). If you take the funds out, you\u2019ll pay taxes but with no penalties. In contrast, the 403(b) is a qualified plan that reduces your income and is transferable to an IRA if and when you leave the educational institution.\r\n\r\nDecide on which plan fits your financial need better. The 403(b) is more traditional while the 457(b) is an additional option for those who max out on their 403(b) contribution. Consult with a financial advisor to help you determine which is more appropriate for your specific situation.