How Can I Contribute to a 457 Plan?

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How Can I Contribute to a 457 Plan?

As with all retirement plans, how much you can contribute to a 457 plan may rise from year to year, based on indexing by the federal government. It is the same as the contribution limit to 401(k)s.

This year’s contribution limits

For 2025, you can contribute up to $23,500. Any future increases will be indexed to inflation. This contribution amount applies to both governmental and non-governmental plans.

If you are 50 or over, you can contribute an additional $7,500 per year. But these catch-up contributions are only allowed in governmental plans. If you are 60 to 63, your max catchup is $11,250.

Some employees get another catch-up contribution

There is yet an additional catch-up contribution (called the "three-year catch-up") that is available only to employees who are within three years of their plan’s normal retirement age. This type of catch-up is available to both governmental and non-governmental plans.

The amount of the three-year catch-up contribution is the lesser of:

• Twice that year’s regular contribution limit OR
• The regular contribution limit for that year, PLUS the amount by which you under-contributed in previous years.

Note that if you are eligible for the three-year catch-up contribution, you are not eligible for the 50-or-over catch-up contribution.

You can be automatically enrolled

457 plans are eligible for automatic enrollment of employees. This means that, unless you deliberately choose otherwise, your employer can automatically enroll you in the plan shortly after you’re hired and divert some of your income to the plan from your paycheck. You can also elect to have a different amount contributed. Automatic enrollment plans have shown some success in raising participation rates in retirement plans.

You can also get matching contributions

As with the more well-known 401(k) plans, your employer can provide a matching contribution to your plan. This can help your plan grow faster than it would if you were funding it alone. Matching contributions are determined by your company. Employer matches are not common, however.

If you also have a 403(b) plan

One advantage of the 457 is that if your employer also offers a 403(b) plan, you can make contributions to both. You can also contribute the maximum allowed to each plan—a big plus if you have the ability to maximize your contributions.

Review the plan provisions for both in detail and/or consult a financial advisor who specializes in working with employees eligible for these types of plans.