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401(k) plans offered by for-profit companies

I started a new job and saw in my financial packet I don't have a 401(k), but a 403(b). How are the two different?

— Heather M., TalentCongratulations on your new job, Heather! 

While they have different names, the two plans basically work the same way. According to CNN Money, the main difference is the type of employer who can offer each plan to its employees. 401(k) plans are offered by for-profit companies, but 403(b) plans are available only to those working for a tax-exempt organization. These include schools, hospitals and religious groups. The name of the plan refers to the section of the tax code that outlines each one.

In the past, 403(b) plans have offered more limited investment choices, but they've recently started to offer a variety of investment options. Additionally, 401(k) plans often have vesting schedules spread over the course of a few years, but their counterpart vests immediately or over a shorter period of time.— Send questions to “Since You Asked,” Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by email to youasked@mailtribune.com. To see a collection of columns, go to mailtribune.com/youasked. We’re sorry, but the volume of questions received prevents us from answering all of them.