The 401(k) plan is one of the most popular employee benefits, and more than 50 million workers are active participants in a 401(k) plan. By any measure, the 401(k) is now the biggest single asset for many families after home equity. Like other workers in the United States, employees of nonprofit and governmental institutions need to accumulate financial resources sufficient to provide a comfortable retirement. This is not an inconsequential number of people. State and local governments in the United States employ millions of men and women. Millions more are employed by churches, universities, research laboratories, libraries, and public school districts.
This module will help you to understand what 401(k) plans are, when they are appropriate, and how they compare to other plans. This module also examines the Section 403(b) tax-deferred annuity and the Section 457 plan-we’ll look at each in detail. The 403(b) shares many features with the 401(k) used widely in the private sector.