Question

In two or more complete sentences, compare and contrast the 401(k) and the 403(b) savings plans.

Answer 1

401(k) - A retirement plan that some corporations offer their employees.

403(b) - A retirement plan available to employees of nonprofit organizations

Answer 2

The main difference of the two is the kind of employers who can offer the saving plans. For 403(b) saving plans, this applies to nonprofit companies, schools, government organizations, hospitals and religious groups. They are exempt of some administrative processes making it less costly compared to 401(k) savings plan. 401(k) savings plan is applied on private companies.