Before-tax versus After-tax Roth 403(b) Contributions

The Retirement Plan gives you a choice as to whether you want to make your contributions on a before-tax or after-tax basis.

Before-Tax Contributions - You will not have to pay any taxes (except Social Security) on the portion of pay you put into the plan. According to federal law, such before-tax contributions are treated as University contributions. Therefore, your contributions are not considered taxable income, and you are not required to pay income taxes on that money until you receive payment of your accounts. This will normally be after your retirement, when your taxable income and your tax rate may be lower.
Your before-tax contributions, as well as Roth 403(b) contributions, are subject to applicable Social Security tax withholdings.

Roth 403(b) Contributions - Available only with Fidelity Investments - Your contributions will be made on an after-tax basis. Earnings on your Roth 403(b) account are tax-free when withdrawn as long as the withdrawal is qualified. A qualified withdrawal, is one that is taken (i) no earlier than the fifth calendar year after the year of your first Roth contribution and (ii) after you have attained age 59 1/2, become disabled or die.