The federal government sets the maximum amount you can contribute each year to your 403(b) at the same level that eligible employees can contribute to a 401(k). If you’re 50 or older, you can also make an annual catch-up contribution to increase your account value as you get closer to retirement.
The maximum you can put into a 403(b) in 2008 is $15,500, plus $5,000 more if you're 50 or older, for a total of $20,500. These amounts may increase in the future to keep up with inflation.
Matching contributions
Employers are less likely to match contributions to a 403(b) than they are to a 401(k). There are two key reasons. First, 403(b)s are sometimes offered in addition to a traditional defined benefit retirement plan, which the employer funds. Second, employers who do match contributions must assume fiduciary responsibility for the plan investments. That makes them subject to more government oversight than if they did not contribute to your account.
If your employer does match, and you have a traditional 403(b), the matching funds go into the same account. But if you have a Roth 403(b), matching contributions may be made to a traditional 403(b) established in your name.
