• Your annual gross income is reduced by the amount you contribute to your 403(b). This is called a pretax contribution. Pretax contributions can greatly reduce your tax bill. For example, if you contribute $100 a month to a 403(b), your monthly gross income will be reduced by $100. If you are in a twenty percent tax bracket, you will pay $20 less in taxes every month, so your $100 investment would really be costing only $80. Note however, your Social Security (FICA) taxes are based on your gross income.
• Your earnings are tax-deferred. That means the interest, dividends, or capital appreciation you earn on your 403(b) contributions will not be taxed until you start withdrawing money, generally at retirement.
• Automatic payroll deductions make saving for retirement easy. You’re less likely to miss money you never see.
• Contributions to a 403(b) plan will not reduce your Social Security benefit.
• Some plans have loan features that let you withdraw money (without tax or penalties) as a loan. Of course, you will be charged interest on the loan, and failure to pay the loan back within the agreed-upon terms may result in adverse tax consequences.
• Your employer may contribute to your plan. Employer contributions and earnings on your 403(b) account grow tax-deferred. Since employer contributions and earnings are not taxed until they are withdrawn, your account balance may grow more quickly.

May I Participate in a 403(b) If I Participate in Other Plans?
If you already participate in a defined benefit plan (e.g., 401(k) plan) you may still be able to contribute to a 403(b) retirement plan. You will need to check with your benefits specialist or tax professional to find out what’s allowable in your specific situation. If your employer is eligible but does not have a 403(b) retirement plan available, ask your benefits specialist about starting one.