A 403 (b) plan is a retirement savings plan available for public education organizations. It has tax treatment similar to a 401(k) plan. Employee salary deferrals into a 403 (b) plan are made before income tax is paid and allowed to grow tax-deferred until the money is taxed as income when withdrawn from the plan. 403(b) plans are also referred to as a tax-sheltered annuity.
The 457 plan is a type of deferred-compensation retirement plan that is available for governmental employers. The employer provides the plan and the employee defers compensation into it on a pre-tax basis. For the most part the plan operates similarly to a 401(k) or403(b) plan most people are familiar with. The key difference is that there is no penalty for withdrawal before the age of 59½ (but subject to income tax).