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
- 2023: $22,500
- 2024: $23,000
- Participants aged 50 and older at any time during the calendar year are permitted to contribute an additional $7,500.
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