Lynn works for a state university. In addition to the university's regular retirement plan, Lynn participates in another retirement savings plan. She elected to have $5,000 of her salary withheld and contributed to a tax-sheltered annuity with an insurer. The type of plan that Lynn established is called a

Question

Quizplus · Accepted Answer

A 403(b) plan (also known as a tax-sheltered annuity or TSA) is a retirement savings plan for employees of certain tax-exempt organizations, such as universities, colleges, charities, and some hospitals. Lynn's election to withhold $5,000 of her salary and contribute it to a tax-sheltered annuity indicates that she is participating in a 403(b) plan. Therefore, B) is the correct choice. The other options (A) SIMPLE plans, (C) defined benefit plans, and (D) Keogh plans) are not applicable to Lynn's situation based on the information provided in the question.

Lynn Works for a State University