457(b) Plan FAQs

A 457(b) plan is a tax-advantaged retirement savings plan offered to employees of state and local governments, as well as certain non-profit organizations. It allows participants to contribute pre-tax or after-tax (Roth) dollars to save for retirement.

Employees of state and local governments and certain non-profit organizations are eligible to participate in a 457(b) plan. Eligibility criteria may vary based on the employer’s specific plan.

For 2024, the contribution limit for a 457(b) plan is $23,000 for individuals under 50. Participants aged 50 or older can contribute an additional $7,500 as a catch-up contribution, bringing the total to $30,500.

Yes, you can participate in both a 457(b) plan and another retirement plan, such as a 401(k) or 403(b). Contribution limits for 457(b) plans are separate, allowing for additional retirement savings.

Yes, unlike other retirement plans, withdrawals from a 457(b) plan are penalty-free before age 59½. However, withdrawals are still subject to income tax unless they come from Roth contributions.

One key difference is that 457(b) plans allow penalty-free withdrawals before age 59½. Additionally, 457(b) plans are often offered to government and non-profit employees, while 401(k) plans are for private-sector employees and 403(b) plans are for public school and non-profit employees.

Investment options in a 457(b) plan usually include mutual funds, target-date funds, and sometimes annuities. The specific options depend on the plan provider and the employer.