Which retirement plan is specifically for employees of certain nonprofit organizations?

A 403b plan is specifically designed for employees of certain nonprofit organizations, such as public schools, hospitals, and other tax-exempt organizations. This type of retirement plan allows employees to set aside a portion of their salary on a pre-tax basis, helping them save for retirement while reducing their taxable income.

The 403b plan is similar to a 401k plan, which is generally available to employees of for-profit companies, but it is uniquely tailored for the nonprofit sector. It offers various investment options and is governed by specific IRS regulations pertinent to nonprofit organizations.

In contrast, a defined benefit plan is a type of retirement plan that provides a predetermined payout at retirement, often based on salary and years of service, and is not limited to nonprofit organizations. A traditional IRA is an individual retirement account that allows individuals to save for retirement with tax advantages, but it is not exclusive to nonprofit employees. Finally, a 401k plan is mainly utilized by for-profit companies and does not cater specifically to nonprofit employees, making the 403b plan the appropriate choice for this context.