Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

Who is eligible to contribute to a 403(b) plan?

1. All professionals

2. Public school teachers and military instructors

3. Teachers, military personnel, and some professionals

4. Engineers and healthcare providers only

The correct answer is: Public school teachers and military instructors

The correct answer identifies the specific groups that are primarily eligible to contribute to a 403(b) plan. A 403(b) plan is a retirement savings plan designed for certain employees of public schools, tax-exempt organizations, and certain ministers. Specifically, public school teachers and military instructors fall into this category, making the answer pertinent to those employed in educational and military roles. While there might be a broader range of individuals who work in tax-exempt organizations that could potentially participate in a 403(b) plan, this option accurately highlights the main groups typically recognized for contributions. Understanding this eligibility is crucial because it helps clarify who can utilize this retirement savings vehicle, which is often offered as an option to employees in the public sector and eligible non-profit organizations. The other choices include professions or categories of individuals that are not typically associated with the 403(b) plan, either being too broad or mentioning specific occupations not generally eligible for such plans. This context reinforces the importance of recognizing the primary beneficiaries of a 403(b) and understanding its intended purpose.