Updated August 3, 2026. Quick answer: for contribution limits and the 10% early-withdrawal tax they behave the same — a 403(b) is on the 4974(c) list just like a 401(k), and both share the same 402(g) deferral limit. The real differences are who can offer them, what you can invest in, and whether ERISA protections apply at all.
Where they are identical
- Deferral limit. Both are “elective deferrals” under 402(g)(3) and share one $24,500 limit in 2026 — across both, not each.
- Catch-ups. $8,000 at 50, $11,250 at ages 60 to 63.
- The 10% early tax. Both are 4974(c) plans, so both are exposed before 59½ unless an exception applies.
Where they genuinely differ
- Who offers them. 403(b) plans are limited to public schools, certain tax-exempt organisations and some ministers; 401(k) plans are the private-sector default.
- What you can hold. A 403(b) is restricted to annuity contracts and mutual funds. That single restriction is why annuity products dominate K-12 menus, and it is a legal constraint rather than a sales failure.
- ERISA coverage. Many public-school 403(b) plans are non-ERISA, which changes the protections and the oversight a participant can expect. Verify your own plan’s status — it is not uniform, and we have not published a general claim about it here because it is not general.
- The 457(b) that often sits alongside. A public-sector worker with a 403(b) frequently also has a 457(b), which has a separate limit — the dual-limit page. A 401(k) worker rarely has anything comparable.
Church and ministry plans are a third category again, with their own rules on housing: retirement plan options for pastors and church employees, and what happens to a housing allowance once you retire.
What to do with that
If you are choosing between employers, the presence of a 457(b) alongside a 403(b) is worth real money in deferral capacity. If you are inside a 403(b) already, the question worth your attention is the investment menu and its costs, because that is where the restriction to annuities and mutual funds actually shows up in your balance.
Related: 403(b) withdrawal rules · what happens when you leave.
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Penalty and limit statements on this page are read from the Internal Revenue Code itself (26 U.S.C. 72, 402, 414, 457 and 4974) and from IRS Notice 2025-67 for the 2026 figures. General information, not tax advice; your plan document can be more restrictive than the Code, and it governs what your plan actually allows.