Contents
An Overview of Retirement Plans
Retirement Plan Terminology
401(k) Retirement Plans
403(b) Retirement Plans
457(b) Retirement Plans
Traditional IRAs
Roth IRAs
SEP IRA and SIMPLE IRA Plans
Rollover IRAs
How to Manage Your Retirement Plan
How to Consolidate Different Retirement Plans
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457(b) Retirement Plans
457(b) plans are very similar to 401(k)s and 403(b)s but are available only to U.S. government employees and employees of certain nongovernmental tax-exempt U.S. employers, such as public schools and universities.
457(b)s vs. 401(k)s and 403(b)s
457(b) plans are similar to 401(k)s and 403(b)s, with the following major exceptions:
- Withdrawal penalties: Assets in 457(b) accounts are not charged a 10% penalty for withdrawal before age 59 1/2.
- Special catch-up provision: 457(b) plans also offer a unique catch-up provision. If you’re within three years of retirement (as defined by your specific plan), you can double your usual catch-up contribution amounts, under certain conditions.
- Multiple plans: Most employers who offer 457(b) plans also qualify to offer 401(k) or 403(b) plans. If you’re an employee of such a company, you can contribute up to the maximum contribution limits of both plans. In addition, if you’re over age 50, you can contribute the special additional catch-up amount into both your 403(b) and 457(b) plans.
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