Introduction to 457(b) Plans

They’re not as well known as their cousins the 401(k) and 403(b), but 457(b) plans (or 457 for short) work in much the same way that 401(k) and 403(b) plans work. You can divert a part of your salary from your paycheck before taxes are taken out and have those funds put into the plan. Your money grows tax-deferred until you withdraw it. However, there are some things that are unique to 457s when it comes to making contributions and taking withdrawals.

Like 401(k)s and 403(b)s, 457 plans are retirement plans for employees of certain types of organizations. In this tutorial we will learn more about what 457 plans are. We will look at who is eligible for them, who offers them, how to contribute, and how to take distributions.