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What is the difference between a 401(k) and a 403(b)? I have both and I am thinking of just consolidating to one or the other. I am 46 and have quite a while before I retire.


There’s not much difference between the two types of retirement plans. They’re just two numbers away from each other in the U.S. Tax Code, after all. Both programs, which generally are offered by private-sector and public-sector employers, respectively, provide tax advantages for contributions and the investment income and gains that they earn. Details are available in IRS Publication 560, which covers employer-sponsored plans.
I’m not sure how you could consolidate your savings “to one or the other.” Any consolidation would have to be into whichever plan is run by your present employer. The choice you seem to have would be to leave the assets that are parked in your former employer’s plan where they are or transfer them into the plan where you work now. Making that choice is similar to making many investment decisions: Compare the options available in each plan – the number and types of asset classes; the quality of the investment managers; the specific mutual funds or other vehicles; their performance records; costs – and go with the one that seems to meet your needs best.
-Conrad de Aenlle