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457(b) Retirement Plan

overall review score: 4.5
score is between 0 and 5
A 457(b) retirement plan is a type of deferred compensation plan available to certain employees of state and local governments, as well as certain tax-exempt organizations. It allows participants to save for retirement by deferring a portion of their salary into a tax-deferred account.

Key Features

  • Tax-deferred contributions
  • Contributions made through payroll deductions
  • Ability to make catch-up contributions for older participants
  • Potential for employer matching contributions

Pros

  • Tax-deferred growth potential
  • Flexible contribution limits
  • May offer lower fees than other retirement plans
  • May offer additional catch-up contributions for older participants

Cons

  • Limited investment options
  • Penalties for early withdrawals before age 59.5
  • Possible restrictions on withdrawals while still employed

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Last updated: Sat, Feb 1, 2025, 09:27:22 PM UTC