Final answer:
Public school employees generally use 403(b) deferred plans, which are tax-deferred retirement plans similar to 401(k)s but tailored for employees in the public education sector and certain nonprofits.
Step-by-step explanation:
Public school employees would participate in a 403(b) deferred plan. Similar to the 401(k) plans found in the private sector, a 403(b) plan is a tax-deferred retirement plan tailored for employees of public schools and certain tax-exempt organizations.
Both the employer and employee can contribute to these plans, which are invested in various vehicles such as stocks, bonds, and annuities, offering a way to save for retirement with tax advantages. Since these plans are portable, they move with the employee between jobs, which is beneficial in the case of job changes throughout one's career.