Which retirement plan is specifically designed for public schools and certain nonprofits?

The retirement plan that is specifically designed for public schools and certain nonprofit organizations is the 403(b) plan. This type of plan is often referred to as a tax-sheltered annuity and is available for employees of public schools, as well as tax-exempt organizations, including charities and some hospitals. This specialized plan allows employees to defer income taxes on their retirement savings and investments until withdrawal, which makes it a valuable tool for educators and nonprofit workers looking to save for retirement.

The 403(b) plan is advantageous because it offers a variety of investment options and sometimes includes additional features such as employer matching contributions and the ability to roll over funds from other retirement accounts. Its focus on educators and nonprofits helps accommodate the unique circumstances and funding models of these sectors, distinguishing it from plans such as the 401(k) and the 457(b), which are designed for different employment sectors, specifically the private sector and government employees, respectively. The SEP IRA also has a different target group, focusing more on self-employed individuals and small business owners. With these features, the 403(b) plan fits the needs of public school employees and certain nonprofits best.