Not all schools offer 403(b) plans, and some educators work at institutions that have chosen other retirement structures or none at all
A 403(b) plan is common at schools, but it is not universal. Some schools do not sponsor a 403(b) at all. Others sponsor a different type of retirement plan — a 401(a), a 457(b), or a cash-balance pension. A few schools offer nothing beyond Social Security. Whether your school matches contributions depends first on whether it offers a plan, and second on whether that plan includes an employer match.
If your school does not sponsor a 403(b), you have other ways to save for retirement. You can open an individual retirement account (IRA) on your own, contribute to a 457(b) if your employer offers one, or both. The rules and contribution limits differ from a 403(b), and you will not receive an employer match unless your school offers a separate match program for those accounts.
Key Takeaways
- Some schools sponsor 403(b) plans with employer matches, some sponsor 403(b) plans without matches, and some sponsor no 403(b) at all.
- Schools that do not offer a 403(b) may offer a 401(a) pension, a 457(b) plan, or a combination of these instead.
- If your school offers no retirement plan, you can open a traditional or Roth IRA independently and contribute up to the annual IRA limit.
- A few school districts offer employer matches into IRAs or other accounts even when they do not sponsor a 403(b).
- Contribution limits and tax treatment differ between 403(b) plans, 401(a) plans, 457(b) plans, and IRAs.
Types of plans schools offer instead of or alongside 403(b)
A 401(a) plan is a defined-contribution plan that some school districts use. It works similarly to a 403(b) in that the employer and sometimes the employee contribute money that grows tax-deferred. However, a 401(a) is less common in schools than a 403(b), and the rules around contributions and withdrawals can be stricter. Some school districts use a 401(a) as their primary retirement vehicle; others use both a 401(a) and a 403(b).
A 457(b) plan is a deferred-compensation plan offered by some public employers, including school districts. It allows employees to contribute pre-tax income and has its own annual contribution limit, separate from a 403(b). A 457(b) is not as common in schools as a 403(b), but some districts offer it alongside or instead of a 403(b). The withdrawal rules for a 457(b) are different: you can withdraw money without penalty once you separate from service, regardless of age.
Some school districts offer a traditional pension or cash-balance plan instead of a 403(b). These are defined-benefit plans, meaning the employer promises a specific retirement income based on salary and years of service. The employee may or may not contribute; the employer funds the benefit. Pensions are less common in schools now than they were decades ago, but they still exist in some districts, particularly in the Northeast and Midwest.
A small number of schools offer no employer-sponsored retirement plan at all. In these cases, employees are responsible for saving on their own through an IRA or other individual account.
How to find out what your school offers
Your school's human resources or payroll office can tell you what retirement plans are available to you. Ask for the plan documents or a summary of plan features. If your school has a benefits website or employee handbook, the retirement plan information is usually there. The document you want is called a Summary Plan Description (SPD) or Summary of Material Modifications (SMM) — these explain what the plan is, who can join, how much you can contribute, and whether the employer matches.
If your school offers more than one plan, ask which one is the default or primary plan for your position. Some schools offer a 403(b) to teachers but a 401(a) or pension to administrators, or vice versa. Your job title and employment status (full-time, part-time, temporary) determine which plans you can join.
If you work at a private school, ask whether the school uses a CREF (College Retirement Equities Fund) or TIAA (Teachers Insurance and Annuity Association) plan. These are 403(b) providers that are especially common at independent schools and colleges. They function as 403(b) plans but have their own rules and investment options.
Opening an IRA if your school does not offer a 403(b)
If your school does not sponsor a 403(b) or any other retirement plan, you can open an individual retirement account (IRA) at a bank, brokerage, or investment company. You have two main choices: a traditional IRA and a Roth IRA. Both allow you to set aside money for retirement, but the tax treatment differs.
With a traditional IRA, contributions may be tax-deductible in the year you make them, and the money grows tax-deferred. You pay income tax on withdrawals in retirement. With a Roth IRA, contributions are made with after-tax money, but withdrawals in retirement are tax-free. The annual contribution limit for both types is the same: for 2024, it is $7,000 if you are under 50, and $8,000 if you are 50 or older. These limits change each year.
If you have access to a 403(b) or 401(a) at your school, you can still open an IRA and contribute to both in the same year. However, if you have a workplace retirement plan, your ability to deduct traditional IRA contributions may be limited depending on your income. Check the IRS rules or speak with a tax professional about your specific situation.
Employer matches for schools without a 403(b)
Most employer matches are tied to a 403(b) plan. If your school does not offer a 403(b), it usually does not offer a match either. However, some school districts have created alternative match programs. For example, a few districts match contributions into a 457(b) plan, or they deposit a flat amount into an employee's IRA each year regardless of whether the employee contributes.
These alternative match programs are rare and vary widely by district. Ask your human resources office whether your school offers any form of employer contribution or match outside of a 403(b). If it does, ask for the rules: how much does the school contribute, when is it deposited, and what do you have to do to receive it.
If your school offers no match and no retirement plan at all, you are saving entirely on your own. This means you have full control over where your money goes and how it is invested, but you also receive no employer contribution.
Comparing contribution limits across plan types
| Plan Type | 2024 Annual Contribution Limit (Under 50) | 2024 Annual Contribution Limit (Age 50+) | Employer Match Common? |
|---|---|---|---|
| 403(b) | $23,500 | $30,500 | Yes, varies by school |
| 401(a) | Varies by plan; often $23,500 or less | Varies by plan | Yes, employer-funded |
| 457(b) | $23,500 | $30,500 | Rare |
| Traditional IRA | $7,000 | $8,000 | No |
| Roth IRA | $7,000 | $8,000 | No |
The contribution limits shown above are for 2024 and are adjusted annually for inflation. If your school offers a 403(b), 401(a), or 457(b), you can contribute much more per year than you can to an IRA. This is one reason why a workplace plan is valuable even without an employer match — it allows you to save more money tax-deferred.
If you have access to both a 403(b) and a 457(b), the limits are separate. You can contribute up to $23,500 to each plan in 2024 (or $30,500 each if you are 50 or older), for a combined total of $47,000. However, this is rare; most schools offer one or the other, not both.
What to do if your school offers a plan but no match
Many schools offer a 403(b) but do not contribute to it themselves. In this case, you can still benefit from the higher contribution limit and the tax-deferred growth. You will straightforward be funding the account entirely with your own money, with no employer contribution.
If your school offers a 403(b) with no match, compare it to opening an IRA. The 403(b) allows you to contribute $23,500 per year (under 50), while an IRA caps you at $7,000. If you want to save more than $7,000 per year, the 403(b) is the better choice even without a match. If you want to save less than $7,000 per year, an IRA may offer more flexibility in terms of investment choices and withdrawal rules.
Some teachers prefer an IRA because they can choose any brokerage or bank, whereas a 403(b) is limited to the providers the school has selected. Ask your school which 403(b) providers are available and what investment options they offer. Then compare those options to what you could get in an IRA at a major brokerage.
Frequently Asked Questions
Can I have both a 403(b) and an IRA at the same time?
Yes. You can contribute to both a 403(b) and an IRA in the same year. The contribution limits are separate: you can contribute up to $23,500 to a 403(b) and up to $7,000 to an IRA in 2024 (if you are under 50). However, if you have a workplace retirement plan, your ability to deduct traditional IRA contributions may be reduced depending on your income.
What happens to my retirement savings if I leave my school?
If you leave your school, you keep the money in your 403(b), 401(a), or 457(b). You can leave it where it is, roll it into an IRA, or roll it into a new employer's plan if you move to another school. The rules vary slightly by plan type, so ask your plan administrator about your options before you leave.
Do I have to contribute to my school's 403(b) if it is offered?
No. Contributing to a 403(b) is optional. If your school offers one, you can choose to participate or not. However, if your school offers an employer match, you may want to contribute at least enough to receive the full match, since that is information programs.
What if my school offers a 401(a) instead of a 403(b)?
A 401(a) works similarly to a 403(b) in that contributions grow tax-deferred and the employer often contributes. However, 401(a) plans often have stricter rules around withdrawals and may require you to leave the money in the account until you reach a certain age or separate from service. Ask your school for the plan documents to understand the specific rules.
Can I open an IRA if I am self-employed or have a side job?
Yes. Even if you work at a school with a retirement plan, you can open an IRA for income from self-employment or a side job. You can also open a SEP IRA or Solo 401(k) if you are self-employed, which allow higher contributions than a regular IRA.