Final answer:
Tax-sheltered annuities (TSAs), or 403(b) plans, provide retirement income and are specifically available for employees of non-profit organizations and educational institutions. They offer tax-deferred savings similar to 401(k)s, which are more typical for private sector employees.
Step-by-step explanation:
Tax-sheltered annuities (TSAs), also known as 403(b) plans, are retirement income vehicles available for certain groups of employees. They are similar to 401(k)s in that they offer a tax-advantaged way to save for retirement. Employees make contributions to their TSA plan through payroll deductions which are then invested to provide income in retirement. The contributions and the investment earnings are not taxed until they are withdrawn, typically at retirement.
Employees who work for non-profit organizations, including educational institutions, are commonly eligible for TSAs. In contrast to TSAs, 401(k)s are generally available to employees in the private sector, including private corporations. Government agencies may offer similar plans called 457 plans. Both 401(k) and 403(b) plans are types of 'defined contribution' plans where the amount contributed is fixed but the payout depends on the investment's performance.