403(b) plans are defined-contribution plans used by nonprofit organizations. They work very much like 401(k) plans, and over time they have started to look more and more like 401(k) plans. Your contributions are tax-deductible and your earnings are tax-deferred until you take the money out at retirement. Like 401(k) plans, the amounts that you and your employer can contribute are limited by law.

Section 457 plans are defined-contribution plans established by government agencies. Like 401(k) and 403(b) plans, they allow you to make tax-deductible contributions and your earnings grow tax-deferred until retirement. One important difference is that your account is funded solely by your own contributions. Your employer doesn't contribute a dime. These plans are still a great benefit because of their tax-deferred feature, but not as great as a 401(k), 403(b), or other plans that include an employer match.