Which account is typically offered to teachers, nonprofit workers, and hospital employees and uses pre-tax contributions?

• A. 403(b)
• B. Roth IRA
• C. Traditional IRA
• D. Social Security

Answer: (A)

This question tests which retirement account is specifically offered to employees like teachers, many nonprofit workers, and hospital staff, and uses pre-tax contributions. A 403(b) plan fits this description: it’s an employer-sponsored retirement account for employees of public schools and certain nonprofit organizations, including many hospitals. Contributions are made with pre-tax dollars, which lowers your current taxable income, and the money grows tax-deferred until you withdraw it in retirement.

This differs from a Roth IRA, where contributions are made with after-tax dollars and qualified withdrawals are tax-free; and from a Traditional IRA, which is an individual account not tied to a specific employer group (though it can offer tax deductions depending on circumstances). Social Security is a government program funded by payroll taxes, not an individual retirement account with pre-tax contributions.