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457 plan. The 457 plan is a type of nonqualified, [1][2] tax advantaged deferred-compensation retirement plan that is available for governmental and certain nongovernmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre tax or after-tax (Roth) basis.
Like its better-known sibling — the 401(k) — a 457(b) retirement plan is a tax-advantaged way to save for retirement. But the 457(b) is designed especially for employees of state and local ...
A 457(b) retirement plan is a tax-advantaged saving scheme available to government and certain non-profit employees. It allows participants to defer income taxes on retirement savings until the ...
Qualifying plans include 401(k) (for non-government organizations), 403(b) (for public education employers), 501(c)(3) (for non-profit organizations and ministers), and 457(b) (for state and local government organizations) [27] Most medium-sized and large companies offer 401(k)’s.
Public employee pension plans in the United States. In the United States, public sector pensions are offered at the federal, state, and local levels of government. They are available to most, but not all, public sector employees. These employer contributions to these plans typically vest after some period of time, e.g. 5 years of service.
State and local government workers can contribute $500 more to their 457 plans in 2020 than they could in 2019. Some workers can make additional catch-up contributions, too.
Retirement plans are classified as either defined benefit plans or defined contribution plans, depending on how benefits are determined.. In a defined benefit (or pension) plan, benefits are calculated using a fixed formula that typically factors in final pay and service with an employer, and payments are made from a trust fund specifically dedicated to the plan.
State and local government workers can contribute $18,500 to 457 plans for 2018. In 2019, the contribution limit climbs to $19,000. Some workers can make additional catch-up contributions.