Retirement Plans for Employees of Non-Profits


When you work for a non-profit company, you may not have access to all of the retirement plan options that people in the private sector have. However, you have access to some options that employees of the private sector cannot get. Understanding your options can help you make the best decision when saving for your retirement.

403b Plans

One of the most common retirement plans offered for employees in non-profit organizations is the 403b plan. This plan allows you to contribute money to your account on a pre-tax basis. In addition to being able to contribute money to your account, your employer can also contribute money to the account on a matching basis. Once you retire, you can have the option to receive your money in annuity payments or you can take it in larger sums.

Roth 403b

Another similar option you may be able to choose is the Roth 403b. With this type of account, you contribute money after you have already paid taxes on the amount. You can invest this money into various securities. Then when the securities earn returns, you do not have to pay taxes on them. When you retire, all of the money you take out of the account is not subject to any income taxes.

401k Plans

The 401k is another type of retirement plan available to employees in the non-profit sector. These plans are also available to employees of the private sector. With these, you get most of the same benefits you can get from the 403b. One of the key differences is that you may not have the annuity option for your payments when you reach retirement age. You can still contribute to the account and your employer can do the same.


If you have all of these options in front of you when working for a non-profit company, look at the investment options for each one. All of these accounts have the same annual contribution limit, so you will not be able to put away more money with a particular one. All of them have a limit of $16,500 per year or $22,000 per year if you are 50 or over, as of 2011. All the options will allow you to save on taxes and save money for your retirement.

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