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Benefits Beginner: Introduction to 457(b) Plans

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1.
If you work for your city government, you are normally eligible for a 457 plan.
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True. A 457 plan is specially made for city and state government employees.
2.
There is no penalty on early distributions from a 457 plan upon termination of employment, whether voluntary or involuntary.
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True. This is one way that 457s differ from other plans.
3.
There are situations in which rolling over a 457 may result in you having to pay taxes.
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True. If you don't roll over all of it, or if you don't place the funds into the new account within 60 days, you can be taxed on the amount that is not rolled over.
4.
You can roll any 457 plan over into any account you wish.
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False. There are restrictions on which plans can accept rollovers from which plans.
5.
Yearly changes in the maximum allowed contribution to a 457 plan are based upon _______.
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Inflation. The federal government indexes these changes to inflation; in years when the inflation rate isn't sufficiently high, there will not be a rise in the contribution limit.