The Retirement Superpower Most University Employees Never Fully Use
By Matthew Ferrell, CFP® | MADE Financial Design
When I was a college professor, I only contributed to the 401(a) — the mandatory defined contribution plan my university offered. It felt like enough. I was saving for retirement, the university was contributing, and I assumed someone would have told me if there was something else I should be doing.
No one told me.
It wasn't until later that I discovered I also had access to a 457(b) and a 403(b) — two additional retirement accounts I could have been maxing out the entire time. I was leaving thousands of dollars in tax savings on the table every year without realizing it.
If you're a professor, department chair, dean, or administrator at a college or university in the Tampa Bay area or anywhere in the country, there's a good chance you're in the same position I was.
The 401(a): Your Foundation
The 401(a) is the employer-sponsored defined contribution plan common at universities. Participation is typically mandatory, both you and your employer contribute, and your control over investment options is limited. It's the floor, not the ceiling.
The 403(b): Your Primary Savings Accelerator
The 403(b) is the voluntary savings plan most universities offer alongside the 401(a). Contributions are pre-tax, growth is tax-deferred, and many institutions also offer a Roth 403(b) option for tax-free growth in retirement. Because it's voluntary, it's also the plan most university employees never get around to enrolling in.
The 457(b): The One Most People Ignore
The 457(b) is a supplemental plan that looks similar to the 403(b) on the surface but has two features that make it uniquely valuable.
First, there is no 10% early withdrawal penalty. You can withdraw when you separate from service, regardless of your age. For faculty and administrators who retire in their 50s, this can save tens of thousands of dollars.
Second, it has its own completely separate contribution limit, which brings us to the part that changes everything.
Stack Them Both
The 403(b) and 457(b) have independent contribution limits. If your employer offers both, you can max out both simultaneously.
In 2026, that looks like this:
Age 403(b) 457(b) Combined
Under 50 $24,500 $24,500 $49,000
50-59 or 64+ $32,500 $32,500 $65,000
60-63 $35,750 $35,750 $71,500
The age 60-63 "super" catch-up of $11,250, introduced under the SECURE 2.0 Act, is one of the most underutilized provisions in retirement planning today.
2026 note: If you earned more than $150,000 in FICA wages in 2025, your catch-up contributions must be made as Roth contributions this year. It changes your near-term tax picture and is worth reviewing with an advisor.
What We See Here in Tampa Bay
Working with educators and administrators in the greater Tampa Bay area, we see the same pattern regularly: generous retirement benefits sitting underutilized, expensive annuity products buried inside 403(b) plans quietly eroding returns, and no clear plan for turning those accounts into reliable retirement income.
Knowing which account to draw from first, when to take Social Security, and how to manage taxes throughout retirement is where the real planning happens, and where good guidance pays for itself many times over.
I know what it's like to sit on the other side of this. I was a professor who didn't know what I had. Let's make sure you don't make the same mistake.
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Matthew Ferrell is a CFP® professional and founder of MADE Financial Design, a fee-only financial planning firm serving pre-retirees and retirees in Land O' Lakes, Wesley Chapel, the greater Tampa Bay area, and nationwide. This content is for educational purposes only and does not constitute personalized financial or tax advice.
