By contributing to a 403(b) Plan you can save for retirement and at the same time receive tax advantages.
At the time they are made into the plan, Traditional 403(b) contributions are not subject to Federal or, in most cases, State income tax. These contributions and any earnings on the deferrals are taxed at the time they are withdrawn or distributed to you, usually after you have retired.
Roth 403(b) contributions are subject to Federal and State income taxes at the time of deferral but the contributions and any earnings on them are generally not taxable income when withdrawn or distributed.
