A 403(B) plan is a tax advantaged retirement savings plan for employees of nonprofit organizations, qualified educational and hospital institutions, and self-employed ministers. Tax rules are similar to those for the more common 401(K), generally allowing for pre-tax retirement savings contributions and tax deferral until the date of withdrawal. The 403(B) is sometimes referred to as a “tax-sheltered annuity” reflecting the original plan design that required money be invested in annuities. 403(B) plans generally have simpler reporting requirements than 401(K) plans and in most cases they are not subject to the same discrimination testing requirements. Both employees and employers may make contributions to which annual limits apply. Unless made for qualifying hardship events, 403(B) withdrawals prior to the age of 59 1/2 are subject to a 10% penalty above the ordinary income tax levied against distributions. Notably, since 2006 403(B) plans have been allowed to include “Roth” or after-tax contribution options that are generally tax-free at withdrawal. As a result of the Bankruptcy Reform Act of 2005, funds held in a 403(B) plan are protected from creditors under most circumstances in the event of personal bankruptcy. As with 401(K) and IRA plans, 403(B) funds are subject to annual required minimum distributions (RMD) beginning the year after the account holder reaches the age of 70 1/2. Significant excess accumulation penalties are levied if the RMD is not taken.