Most 403(b) plans enable employees to take distributions at retirement age, but many permit earlier payments under certain circumstances. For example, a 403(b) plan can allow participants to receive payment benefits after terminating the employment, even if that happens before they reach retirement age, 59½.

Participating employees may only obtain a 403(b) annuity under an employer's TSA plan, although dual 403(b) accounts can also include a) a custodial account invested in mutual funds, or b) a retirement income account set up for church employees invested in either annuities or mutual funds. However, 403(b) plans cannot be funded with life insurance (issued after September 24, 2007), endowments, or health, accident or other types of insurance contracts.

Finally, a 403(b) retirement plan also contains a unique provision called the lifetime catch-up. The lifetime catch-up is available to employees who have reached their 15th year of service and have contributed an average of less than $5,500 per year to their 403(b) plan. Because of traditional 403(b) plans' pre-tax status, the IRS limits the amount of money that can be put into those funds each year. For example, as of tax year 2010, the largest amount a taxpayer can make pre-tax to a traditional 403(b) is $16,500.

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