{"id":4813,"date":"2023-12-12T08:16:07","date_gmt":"2023-12-12T13:16:07","guid":{"rendered":"https:\/\/scarletoakfs.webarc.dev\/?p=4813"},"modified":"2023-12-11T15:41:36","modified_gmt":"2023-12-11T20:41:36","slug":"understanding-457-plans","status":"publish","type":"post","link":"https:\/\/scarletoakfs.com\/understanding-457-plans\/","title":{"rendered":"Understanding 457 Plans [2024]"},"content":{"rendered":"[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]457 plans are offered by state and local governments and some non-profits. These are pre-tax accounts; just like 401(k) and 403(b) plans, contributions come from your paycheck before income tax is withheld, but you will pay taxes when you withdraw the money in retirement. But in the meantime, the account is allowed to grow tax-deferred. There are two types of 457 plans- 457(b) offered to state and local government employees, and 457(f) offered to highly compensated government and select non-government employees.[1]<\/a><\/p>\n

Key aspects of <\/strong>457(b) plans:<\/strong><\/h3>\n[\/vc_column_text]
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Updated For 2024:<\/strong> Yearly contribution limits<\/strong> are $23,000 for people younger than 50 and an extra $7,500 catch-up amount for those 50 and older for 2024. Contributions are made from January to December of that year.[2]<\/a> <\/div>
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Unique to 457(b) plans: <\/strong>Unlike 401(k)s and 403(b)s, in a 457(b)-plan, employer and employee contributions<\/strong> count towards the $23,000 limit for the under 50 and towards $30,500 for the over 50. So, for example, if you are 35 and your employer adds $10,000, you can only add $13,000. These plans rarely match.[3]<\/a>,[4]<\/a> <\/div>
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Updated For 2024:<\/strong> 457(b) plans feature a “double limit catch-up<\/strong>” provision. This catch-up allows employees within three years of retirement age (as specified in their plan) to contribute $46,000 in 2024, twice the annual contribution limit.3,[5]<\/a> <\/div>
<\/div><\/div>[vc_column_text]<\/a>If you have access to another employer sponsored plan like a 401(k)<\/a> or 403(b)<\/a>, you can contribute the maximum amount ($23,000 in 2024) to each plan. The $7,500 over 50 catch-up can only be contributed to one of the plans if applicable.[6]<\/a><\/p>\n