403b’s are a supplemental retirement savings plan for employees that work for non-profit organizations.  They provide a defined contribution (401k-like) program as a supplement to an employee’s defined benefit (such as a state pension or social security) program.

These programs provide important tax preferences (pretax or roth – See article below if you need further explanation) to help employees save in addition to their primary retirement plan (state pension or social security).  With the trend of public pensions reducing benefits and the probable likelihood that Social Security will reduce future benefits, it is becoming increasingly more important for employees to understand and utilize these programs.