IRC 403(b) Tax-Sheltered Annuity Plans: 2026 Contribution Limits, Mandatory Roth Catch-Up, and Plan Requirements

Overview: The IRC 403(b) Tax-Sheltered Annuity Framework

IRC 403(b) authorizes tax-sheltered annuity (TSA) plans for employees of public educational institutions and IRC 501(c)(3) tax-exempt organizations. With approximately 9 million participants as of the most recent available data, the 403(b) is the second-largest employer-sponsored defined contribution retirement plan category in the United States, after the IRC 401(k). Its reach spans public school teachers, hospital employees, university faculty, social service workers, and employees of the broad universe of charitable and nonprofit entities that operate under IRC 501(c)(3).

The 403(b) and 401(k) share the same general tax treatment: employee elective deferrals reduce current taxable income (or, for designated Roth contributions, are made after tax with tax-free growth), employer contributions accumulate on a tax-deferred basis, and distributions are taxed as ordinary income (except qualified distributions from Roth accounts). Despite these similarities, the two plan types differ in material respects: eligible employers, investment options, the universal availability rule, nondiscrimination testing obligations, and -- critically for 2026 -- the interaction with SECURE 2.0 Act mandatory compliance deadlines.

Several 2026 compliance deadlines make this an immediate operational priority for 403(b) plan sponsors. Most significant is the mandatory Roth catch-up requirement under SECURE 2.0 Section 603, which took effect January 1, 2026, and requires that high-earning catch-up contributors direct their catch-up contributions to a designated Roth account. Sponsors that have not updated payroll and recordkeeping systems face an active operational compliance risk as of the first payroll date in 2026.

Eligible Employers: Public Schools, 501(c)(3) Organizations, and Ministers

IRC 403(b)(1) defines the class of employers that may establish and maintain a tax-sheltered annuity plan. The eligible employer definition is narrower than the universe of employers that may sponsor a 401(k) plan, which is open to any employer in interstate commerce. Understanding who qualifies -- and who does not -- is a threshold question for every 403(b) plan engagement. Verify the current eligible employer definitions and any IRS guidance at IRS.gov.

Public Educational Organizations

A public school qualifies as an eligible 403(b) employer under IRC 403(b)(1)(A)(ii) if it is a state, political subdivision of a state, or an agency or instrumentality of either, and it is an educational organization as defined in IRC 170(b)(1)(A)(ii). An educational organization normally maintains a regular faculty and curriculum and normally has a regularly enrolled student body in attendance. This includes public elementary and secondary schools (K-12 districts), public community colleges, state universities, and state-supported vocational and technical schools. It does not include general government departments (municipal offices, police departments, courts, or similar agencies) that do not independently function as educational organizations. Verify the current public school and governmental entity definitions at IRS.gov.

IRC 501(c)(3) Tax-Exempt Organizations

Any organization that holds tax-exempt status under IRC 501(c)(3) -- the charitable, religious, educational, scientific, and literary exemption -- may sponsor a 403(b) plan. This covers private colleges and universities, hospitals and health systems, research foundations, private K-12 schools (both religious and nonsectarian), social service agencies, arts organizations, and the entire range of public charities operating under IRC 501(c)(3). The key requirement is that the organization must be recognized as exempt under IRC 501(c)(3), not another subsection of IRC 501(c). A trade association exempt under IRC 501(c)(6), a social welfare organization under IRC 501(c)(4), or a labor union under IRC 501(c)(5) cannot sponsor a 403(b) plan. For-profit employers, regardless of size or industry, are categorically ineligible. Verify the current 501(c)(3) determination requirements and any ruling procedures at IRS.gov.

Ministers and Chaplains

IRC 403(b)(1)(B) and IRC 414(e)(5)(A) allow a duly ordained, commissioned, or licensed minister of a church, or a member of a religious order who has not taken a vow of poverty, to participate in a 403(b) plan as a self-employed individual performing services in the exercise of ministry. A minister employed by a 501(c)(3) organization (such as a church-affiliated hospital or school) participates under the employer's 403(b) plan. A self-employed minister may maintain a 403(b) account directly with an approved annuity issuer or custodian. Verify the current minister-eligibility rules and self-employment income definitions at IRS.gov.

Church Plans Under IRC 403(b)(9)

Churches and qualified church-controlled organizations (QCCOs) may maintain 403(b) church plans under IRC 403(b)(9). Church plans are not required to comply with certain provisions that apply to other 403(b) plans -- notably, ERISA's Title I requirements (including the written plan document and trust requirements), certain nondiscrimination testing rules, and the universal availability requirement in the same form it applies to non-church plans. Church plans have significant flexibility but also significant complexity. The interplay between church plan status, the IRC 414(e) definition, and ERISA exemption should be analyzed carefully for each entity. Verify all church plan rules, QCCO definitions, and applicable exemptions at IRS.gov.

Eligible Investments: Annuity Contracts, Custodial Accounts, and Church Plans

IRC 403(b) restricts the investment vehicles that may hold participant accounts. Unlike a 401(k) plan, which may invest plan assets in a broad range of instruments held in a trust, IRC 403(b) limits investments to two primary vehicle types -- annuity contracts and mutual fund custodial accounts -- plus a church plan certificate of participation. Understanding these restrictions is essential for plan sponsors and for advisors recommending investment menus. Verify the current eligible investment rules and any IRS guidance at IRS.gov.

Annuity Contracts from Insurance Companies

The original and still most prevalent funding vehicle for 403(b) plans is an annuity contract issued by an insurance company. Under IRC 403(b)(1), the annuity contract must be purchased for the employee by the eligible employer. The contract must be non-transferable (with limited exceptions for transfers between 403(b) contracts or to an IRA on separation from service), must not be a whole life insurance policy, and must satisfy the distribution restrictions of IRC 403(b)(11). Fixed, variable, and indexed annuity contracts all qualify. Annuity contracts may accumulate on a tax-deferred basis, and the insurer typically provides a variety of investment sub-accounts in a variable product or a fixed crediting rate in a fixed product. Verify the current annuity contract requirements, non-transferability rules, and permissible contract features at IRS.gov.

Mutual Fund Custodial Accounts: IRC 403(b)(7)

IRC 403(b)(7) permits a 403(b) plan to be funded through a custodial account holding shares of a regulated investment company (mutual fund), provided certain requirements are met. The custodian must be a bank or an entity approved by the IRS as a non-bank custodian. The custodial account must satisfy the distribution restrictions of IRC 403(b)(11) in the same manner as an annuity contract. Critically, IRC 403(b)(7) does not permit self-directed brokerage accounts, individual securities holdings (stocks, bonds, ETFs), or alternative investments within a 403(b) plan; the investments must be shares of regulated investment companies. This restriction distinguishes 403(b) plans from 401(k) plans, which may offer brokerage windows and a broader range of permissible investments. Verify the current IRC 403(b)(7) custodial account requirements and IRS-approved non-bank custodian rules at IRS.gov.

No Self-Directed Brokerage Within 403(b)

The statutory limitation to annuity contracts and mutual fund custodial accounts means that plan sponsors may not offer a self-directed brokerage account (SDBA) as a 403(b) investment option. This is a meaningful restriction for participants accustomed to the broad investment menus available in 401(k) plans with brokerage windows. Participants who want access to individual securities, ETFs, or non-mutual-fund investments must look outside the 403(b) -- for example, to a 457(b) plan (if available) or to a personal IRA or taxable account. Verify the current investment restriction rules and any IRS guidance permitting alternative arrangements at IRS.gov.

Roth 403(b) Accounts

A 403(b) plan may include a designated Roth account feature permitting participants to designate elective deferrals as after-tax Roth contributions. The plan must maintain separate accounting for each participant's designated Roth contributions and their attributable earnings. Qualified distributions from a Roth 403(b) account (made after a five-year holding period and after the participant reaches age 59.5, dies, or becomes disabled) are excludable from gross income. SECURE 2.0 Act eliminated required minimum distributions from designated Roth accounts in 403(b) plans for tax years beginning after December 31, 2023; see Section 6 below for details. Participants may roll over a Roth 403(b) account to a Roth IRA, but not to a traditional (pre-tax) IRA. Verify the current Roth 403(b) qualification requirements, five-year holding period rules, and rollover rules at IRS.gov.

2026 Contribution Limits: Elective Deferrals, Annual Additions, and Catch-Ups

403(b) contribution limits for 2026 are governed by IRC 402(g) (elective deferral cap), IRC 415(c) (annual additions cap), and IRC 414(v) (catch-up contributions). Research indicates the following figures for 2026; verify all current inflation-adjusted limits at IRS.gov before using any figure in participant communications, plan documents, or client advice.

Elective Deferral Limit: IRC 402(g)

The basic elective deferral limit under IRC 402(g) applies to the total pre-tax and designated Roth salary-reduction contributions an individual makes across all 403(b), 401(k), and SIMPLE plans for the calendar year. Research indicates the 2026 limit is $24,500; verify the current inflation-adjusted limit at IRS.gov. Because the limit is per person (not per plan), a participant who defers in both a 403(b) and a 401(k) plan in the same year must aggregate those deferrals against the single IRC 402(g) limit. Excess deferrals must be distributed by April 15 of the following year to avoid double taxation. Verify the current excess deferral correction procedures at IRS.gov.

Standard Catch-Up Contributions: IRC 414(v), Age 50 and Older

Participants who are age 50 or older by the end of the calendar year may make additional elective deferrals above the IRC 402(g) limit, provided the 403(b) plan permits catch-up contributions. Research indicates the 2026 age-50 catch-up limit for 403(b) plans is $7,500; verify the current inflation-adjusted limit at IRS.gov. Catch-up contributions under IRC 414(v) are not counted as annual additions for IRC 415 purposes and are not subject to nondiscrimination testing (verify the current catch-up exclusions at IRS.gov). Beginning January 1, 2026, catch-up contributions by participants who earned more than $145,000 in prior-year FICA wages from the same employer must be made as Roth contributions; see Section 5 below for the mandatory Roth catch-up rule.

Super Catch-Up for Ages 60-63: SECURE 2.0 Section 109

SECURE 2.0 Act Section 109 introduced a higher catch-up contribution limit for participants who attain age 60, 61, 62, or 63 during the calendar year. Research indicates the 2026 super catch-up limit for 403(b) plans is $11,250; verify the current limit at IRS.gov. The super catch-up is the greater of $10,000 (indexed) or 150% of the otherwise applicable standard catch-up amount for the year; research indicates the 150% figure equals $11,250 for 2026 (150% of $7,500). For a participant turning 61 in 2026, the maximum deferral would be $24,500 (standard) plus $11,250 (super catch-up) = $35,750 (verify all limits at IRS.gov). The super catch-up applies to participants in the 60-63 window and replaces (does not stack on top of) the standard age-50 catch-up for those participants. Once the participant reaches age 64, the standard age-50 catch-up limit applies again.

Special 15-Year Rule Catch-Up: IRC 402(g)(7)

IRC 402(g)(7) provides a 403(b)-only catch-up for long-service employees that is not available in 401(k) plans. Eligible employees may make additional elective deferrals of up to $3,000 per year (verify the current limit at IRS.gov) if they meet all of the following conditions:

• They have at least 15 years of service with the same eligible 403(b) employer;
• Their average annual elective deferral with that employer over all prior years of service was less than $5,000 (verify the current threshold at IRS.gov); and
• Their cumulative lifetime 15-year rule catch-up contributions with that employer have not exceeded $15,000 (verify the current lifetime cap at IRS.gov).

The 15-year rule catch-up is computed using a complicated formula; practitioners should use the IRS worksheet and verify the current calculation method and thresholds at IRS.gov. Unlike the IRC 414(v) age-50 catch-up, the 15-year rule catch-up is included in annual additions for IRC 415(c) purposes; it is not excluded from the $72,000 cap. Verify the current IRC 415 treatment of the 15-year rule catch-up at IRS.gov.

Mandatory Roth Catch-Up: SECURE 2.0 Section 603, Effective January 1, 2026

SECURE 2.0 Act Section 603 imposes one of the most operationally consequential compliance requirements in recent retirement plan history. Beginning January 1, 2026, catch-up contributions made by participants who earned more than $145,000 in FICA wages from the plan sponsor in the prior calendar year must be designated as Roth (after-tax) contributions. IRS Notice 2024-2 extended the administrative transition period through December 31, 2025; that relief has now expired. Plan sponsors that have not completed system updates are in an active operational compliance risk position as of the first payroll date in 2026. Verify the current $145,000 threshold and any remaining transition guidance at IRS.gov and consult independent counsel, as these provisions are recently enacted and implementation guidance may be pending.

How the Mandatory Roth Catch-Up Rule Operates

The mandatory Roth catch-up rule operates as follows for plan years beginning on or after January 1, 2026:

1. Prior-year FICA wage test. At the start of each plan year, the plan administrator (or payroll system) must identify each catch-up-eligible participant (age 50 or older, or age 60-63 for the super catch-up) and determine whether that participant's FICA wages from the same employer in the prior calendar year exceeded $145,000 (verify the current threshold at IRS.gov). FICA wages are wages subject to Social Security and Medicare tax; this is not adjusted gross income or total compensation.
2. Roth routing for high earners. For any participant who exceeds the prior-year FICA wage threshold, every dollar of catch-up contribution must be routed to the participant's designated Roth account, regardless of the participant's own preference. The participant cannot elect to make catch-up contributions on a pre-tax basis if they exceed the threshold.
3. Pre-tax catch-up remains available for others. Participants who did not exceed the prior-year FICA wage threshold may continue to make catch-up contributions on a pre-tax (traditional) basis or may voluntarily elect Roth treatment if the plan offers a Roth feature.
4. Plan document requirement. The 403(b) plan must include a designated Roth account feature. A plan that does not offer Roth contributions is prohibited from accepting any catch-up contributions from participants who exceed the wage threshold; those participants would have no permissible catch-up vehicle. Plan sponsors must amend their plan documents to add the Roth feature if not already present. Verify the current plan amendment deadline at IRS.gov and consult independent counsel.

Impact on Plan Sponsors Without a Roth Feature

A 403(b) plan that does not currently offer designated Roth accounts faces a choice: add the Roth feature before the first catch-up contribution from a high earner in 2026, or suspend catch-up contributions entirely for all participants who exceed the FICA wage threshold. Most plan sponsors will find that adding the Roth feature is the operationally and competitively preferable path. The plan document amendment, recordkeeping platform update, payroll system update, and Summary Plan Description revision must all be coordinated. Verify the current plan amendment timing rules, disclosure requirements, and any available correction methods at IRS.gov and consult independent counsel.

Roth 403(b) Accounts and RMD Elimination

A designated Roth account within a 403(b) plan (a Roth 403(b) account) permits participants to make after-tax elective deferrals that grow tax-free and are distributed tax-free on a qualified basis. The Roth 403(b) option has become more significant under SECURE 2.0 Act for two reasons: the mandatory Roth catch-up rule (Section 5 above) requires plan sponsors to offer the feature, and the RMD elimination for Roth 403(b) accounts (discussed below) removes a significant planning disadvantage that previously existed relative to Roth IRAs.

Five-Year Holding Period and Qualified Distributions

A distribution from a Roth 403(b) account is a "qualified distribution" -- and therefore entirely excludable from gross income -- if two conditions are met: (1) the distribution is made after a five-taxable-year participation period (measured from the first year in which the participant made designated Roth contributions to any 403(b) plan of the same employer; verify the current measurement rules at IRS.gov), and (2) the distribution is made after the participant reaches age 59.5, dies, or becomes disabled. Non-qualified distributions from a Roth 403(b) are subject to the IRC 72(t) early distribution penalty on the earnings portion and the earnings are included in gross income. Verify the current qualified distribution rules and five-year period measurement at IRS.gov.

SECURE 2.0 RMD Elimination for Roth 403(b) Accounts

Rollover Rules for Roth 403(b) Accounts

A participant may roll over a Roth 403(b) account to a Roth IRA or to a designated Roth account in another employer's 403(b) or 401(k) plan, provided the receiving plan accepts the rollover. A Roth 403(b) account may not be rolled to a traditional (pre-tax) IRA or to a pre-tax account in another qualified plan. The five-year holding period for the receiving Roth IRA is measured from the earlier of the year the participant first made Roth IRA contributions or the year the rollover occurred; the 403(b) Roth five-year period does not carry over to the Roth IRA (verify the current rollover and five-year period rules at IRS.gov). This means a participant who rolls a Roth 403(b) to a Roth IRA for the first time may need to restart the Roth IRA five-year holding period. Plan sponsors and advisors should communicate these distinctions clearly before a participant initiates a rollover. Verify all current Roth 403(b) rollover rules and receiving-plan acceptance requirements at IRS.gov.

IRC 415 Annual Additions Limit and Includible Compensation

IRC 415(c) applies to 403(b) plans in the same manner as to 401(k) plans: total annual additions to a participant's account for any limitation year may not exceed the lesser of the dollar limit (research indicates $72,000 for 2026; verify the current inflation-adjusted limit at IRS.gov) or 100% of the participant's includible compensation. However, the definition of "includible compensation" for IRC 415 purposes in a 403(b) plan differs from the definition used in a 401(k) plan context, and this difference has planning significance.

Includible Compensation: Current-Year Basis

Under IRC 403(b)(3), the includible compensation used to compute the IRC 415(c) limit in a 403(b) plan is generally the participant's compensation for the most recent period that can be counted as a year of service (the current limitation year). This contrasts with the IRC 401(a)(17)-capped compensation used in 401(k) plan contexts. For most full-time employees, the practical difference is modest. However, for part-time employees, newly hired employees, or employees who leave partway through the year, the current-year computation can significantly reduce the IRC 415 dollar limit available. Verify the current includible compensation definition, the applicable exclusions, and any special rules for ministers at IRS.gov.

Employer Contributions and the IRC 415 Cap

The IRC 415(c) annual additions limit applies to the aggregate of all elective deferrals and employer contributions (including matching and nonelective contributions) allocated to a participant's 403(b) account in the limitation year. Catch-up contributions under IRC 414(v) (the age-50 catch-up and the SECURE 2.0 super catch-up for ages 60-63) are excluded from annual additions for IRC 415 purposes and do not count against the $72,000 cap (verify the current exclusion rules at IRS.gov). The special 15-year rule catch-up under IRC 402(g)(7) is included in annual additions and does count against the IRC 415 cap -- a planning distinction practitioners must track carefully. Verify all contribution categorization rules at IRS.gov.

Multiple Employer Situations

A participant who receives contributions from two or more unrelated 403(b) plan sponsors in the same limitation year must apply the IRC 415 limit separately to each employer's plan. Unlike the controlled group aggregation rule that applies to 401(a) qualified plans (where contributions from all controlled group members are aggregated against a single IRC 415 limit), unrelated 403(b) sponsors each have their own separate IRC 415 limit. This means a participant who teaches part-time at two unaffiliated universities may theoretically contribute up to the IRC 415 limit with each employer -- subject to the shared IRC 402(g) elective deferral limit. Verify the current 403(b) multiple-employer IRC 415 rules and the interaction with the IRC 402(g) per-person limit at IRS.gov.

Universal Availability Rule: IRC 403(b)(12)

The universal availability rule under IRC 403(b)(12)(A)(ii) is one of the most distinctive features of the 403(b) framework and a significant point of difference from 401(k) plans. Under the universal availability rule, if an eligible employer makes a 403(b) plan available to any employee, it must make the plan available to all employees -- not just a defined class of salaried workers, full-time employees, or employees meeting an hours-of-service threshold. The rule reflects the policy intent that tax-sheltered retirement savings be broadly accessible to the diverse workforce of public schools and nonprofits. Verify the current universal availability requirements and any IRS guidance at IRS.gov.

Permitted Exclusions from Universal Availability

IRC 403(b)(12)(A)(ii) permits a limited set of exclusions from the universal availability requirement. A 403(b) plan may exclude:

• Employees who normally work fewer than 20 hours per week (the 20-hour rule; verify the current hours threshold and measurement method at IRS.gov);
• Students performing services described in IRC 3121(b)(10) (student FICA exception);
• Nonresident aliens who have no effectively connected income from U.S. sources;
• Employees who are already participating in a comparable 401(k) plan, another 403(b) plan, or an eligible governmental 457(b) plan of the same employer; and
• Employees whose maximum elective deferral for the plan year would be $200 or less.

Any exclusion that does not fit squarely within these statutory categories is a universal availability violation. Unlike 401(k) plans -- which can restrict participation based on employment classification, division, or subsidiary entity within a controlled group -- 403(b) plan sponsors may not carve out classes of employees based on compensation level, job category, or work location unless a statutory exclusion applies. Verify the current permitted exclusion definitions and application rules at IRS.gov.

SECURE 2.0 Mandatory Automatic Enrollment for New 403(b) Plans

SECURE 2.0 Act extended the mandatory automatic enrollment requirement to new 403(b) plans. For 403(b) plans established after December 29, 2022 (the SECURE 2.0 enactment date), the plan must include an automatic enrollment feature at a prescribed initial default rate, with annual automatic escalation and a permissible opt-out right for participants. Small employers (with fewer than 10 employees) and new employers (in business for fewer than 3 years) are generally excepted; additional exceptions may apply. Because the universal availability rule requires that automatic enrollment be offered to all eligible employees (subject to permitted exclusions), the automatic enrollment mechanics interact directly with the universal availability standard. Verify at IRS.gov and consult independent counsel, as these provisions are recently enacted and implementation guidance may be pending.

Consequences of Universal Availability Failure

A failure of the universal availability rule places the entire 403(b) plan at risk of disqualification for the plan year of the failure. All contributions made during the year of failure (not just contributions by excluded employees) could lose their tax-deferred status. Correction is available through the IRS Employee Plans Compliance Resolution System (EPCRS), but correction requires remedial contributions to excluded employees and can be administratively and financially significant. Plan sponsors should audit their employee populations at least annually to confirm that no eligible employee class is being inadvertently excluded. Verify the current EPCRS self-correction and voluntary correction program procedures at IRS.gov.

Distribution Rules, Early Distribution Penalty, and RMDs

Distribution rules for 403(b) plans are governed by IRC 403(b)(11) (distribution restrictions), IRC 72(t) (early distribution penalty), and the RMD rules as amended by SECURE 2.0 Act. The distribution framework is generally parallel to the rules applicable to 401(k) plans, with a few 403(b)-specific distinctions. Verify all current distribution rules and any IRS guidance at IRS.gov before advising participants or sponsors on permissible distribution timing and form.

IRC 403(b)(11) Distribution Restrictions

IRC 403(b)(11) restricts distributions from 403(b) annuity contracts and IRC 403(b)(7) custodial accounts to the following triggering events:

• Attainment of age 59.5 by the participant;
• Separation from service with the employer (including retirement);
• Death of the participant;
• Disability (as defined by IRC 72(m)(7));
• Plan termination, if no successor plan of the same type is maintained by the employer; and
• Hardship (for employee elective deferrals only, not earnings; verify the current 403(b) hardship distribution rules at IRS.gov).

The IRC 403(b)(11) distribution restrictions apply only to contributions made after December 31, 1988, and earnings on all contributions after that date. Pre-1989 contributions and earnings in annuity contracts may be subject to different rules under the transitional grandfather provisions; verify the current grandfathering rules at IRS.gov.

IRC 72(t) Early Distribution Penalty

Distributions from a 403(b) plan before the participant reaches age 59.5 are generally subject to the 10% early distribution additional tax under IRC 72(t), in addition to ordinary income tax on the pre-tax distribution amount. The following exceptions apply (verify the current exception list and conditions at IRS.gov):

• Age 55 separation exception: Distributions made to a participant who separates from service in or after the calendar year in which the participant attains age 55 are exempt from the 10% penalty. This exception does not require the participant to reach age 59.5. Note that the age-55 exception applies to distributions from the plan of the employer from which the participant separated; it does not apply to distributions from other plans of former employers taken in the same year.
• Substantially equal periodic payments (SEPP): Under IRC 72(t)(2)(A)(iv), distributions taken as part of a series of substantially equal periodic payments over the participant's life or life expectancy are exempt from the 10% penalty. SEPP elections are irrevocable for a minimum period and modifications trigger retroactive penalty application. Verify the current SEPP calculation methods and modification rules at IRS.gov.
• Death and disability: Distributions following the participant's death or disability (as defined by IRC 72(m)(7)) are exempt from the 10% penalty.
• Qualified domestic relations orders (QDROs): Distributions to an alternate payee pursuant to a QDRO are exempt from the 10% penalty. Verify current QDRO qualification requirements at IRS.gov.
• Other statutory exceptions: IRC 72(t)(2) provides additional exceptions for certain medical expenses, health insurance premiums for unemployed individuals, and other specified events. Verify all current exceptions at IRS.gov.

Required Minimum Distributions

Under the RMD rules as amended by SECURE 2.0 Act, a 403(b) plan participant must begin taking required minimum distributions by April 1 of the calendar year following the year in which the participant reaches age 73 (verify the current RMD age at IRS.gov, as SECURE 2.0 Act schedules a further increase to age 75 beginning in 2033; verify the effective dates at IRS.gov). If the participant is still employed and is not a 5%-or-more owner of the employer, the plan may defer RMDs until April 1 of the year following the year of separation from service. Designated Roth accounts in 403(b) plans are not subject to RMDs for tax years beginning after December 31, 2023, under SECURE 2.0 Act. Verify all current RMD starting dates, calculation methods, and exceptions at IRS.gov.

403(b) vs. 401(k) Comparison Table

All limits cited below are research-based figures for 2026; verify the current inflation-adjusted limits at IRS.gov before advising any client. All plan-design features and regulatory requirements should be confirmed with plan counsel and the governing plan document. SECURE 2.0 provisions carry additional uncertainty; consult independent counsel as implementation guidance may be pending.

All dollar limits, contribution formulas, and plan design requirements cited above are research-based figures for 2026 and must be verified at IRS.gov before use in plan documents or client advice. SECURE 2.0 and OBBBA provisions carry additional uncertainty; consult independent counsel as implementation guidance may be pending.