The specifics of the plan can be complicated, but tax exemption acts as the primary draw of the investment. All contributions made to a 403B are set aside from Federal taxes until retirement. In addition to the savings made on the contribution itself, the overall amount of tax paid is also reduced, as your total pretax income will be lower. This plan is available to the majority of people in any organization that qualifies under the IRS 501(c)(3) tax provision.