457b retirement plans

A 457(b) plan is a Tax-Deferred Retirement Plan available to employees of state and local governmental agencies, including public school employees. They are similar to 401(k) plans because they allow you to place a percentage of your salary into an employer-sponsored plan that helps you save for retirement. You will not have to pay taxes on what you contribute or earnings made until you withdraw the money.

Benefits Include:

  • Investment options: fixed annuities, variable annuities, or mutual funds
  • Flexibility: start, stop, and adjust your contributions as allowed by your employer’s plan
  • Receive periodic account statements
  • No 10% federal penalty on interest or earnings for early withdrawal
  • No current federal income taxes on the money you put into the plan until it is time to take withdrawals

Contribution Limits:

  • In 2021, you can contribute 100% of your includible compensation up to $19,500, whichever is less.
  • If you are age 50 or older, you can contribute up to an additional $6,500 for a total of $26,000.
  • All investing involves risk. Past performance is not a guarantee of future returns.

457(b) PLAN VIDEO