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Glossary of Common Retirement Planning Terms

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401(k) Plan

A 401(k) plan is an employer-sponsored retirement plan, which allows the employee to set aside tax-deferred income for their retirement and possibly be matched by their employer. The employer however is not required to do so.

403(b) Plan

A 403(b) plans are employer-sponsored retirement plan that tax-exempt entities offer their employees. Employees can set aside tax-deferred income for their retirement and lower their taxable income.
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