What is the main purpose of a 403(b) plan?

The main purpose of a 403(b) plan is to provide retirement savings for employees of certain tax-exempt organizations, such as public schools, hospitals, and nonprofit organizations. This type of plan acts similarly to a 401(k), allowing employees to set aside money for retirement while benefiting from tax advantages. Contributions are made on a pre-tax basis, which can lower taxable income in the year they are made, making the plan an effective savings vehicle for retirement.

When individuals working for nonprofit entities participate in a 403(b) plan, they can accumulate savings throughout their careers, which can then be used to provide income during retirement. The plan offers various investment options that can cater to different risk tolerances and retirement goals, making it a valuable tool for long-term financial planning.

The other options do not accurately reflect the primary purpose of a 403(b) plan. Tax evasion is illegal and not associated with any legitimate retirement savings plan. While there might be elements of investment growth involved, a 403(b) plan is not characterized by high-risk investments; it is meant for stable, long-term growth that aligns with retirement savings strategies. Individual tax deductions are a component of many savings and investment strategies, but they are not the primary focus of