What is the difference between 401k and 403b?

401k and 403b are retirement plans that you can get yourself engaged in. But the major difference between them which you should note is that the 401k plan is designed especially for employees that work in profit organization, while the 403b plan is mainly for employees that work in nonprofit organizations like the universities and colleges, public schools, church employees, health organizations, and self-employed ministers.

Joining or starting the 401k plan is stricter than the other, as the employer can do some scrutinizing as he or she wishes. On the contrary, the 403b plan gives a chance for an employee to even kick-start the plan on the very first day of resumption. The 401k plan can even require you to work one full year before you can start the plan. In the 401k plan, a nondiscrimination test is well carried out, which is not really compulsory into 403b retirement plan.