Review:
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