What Is a 457(b) Retirement Plan?
As a public employee, you could contribute to your 457(b) retirement plan to save for your future. In many ways, a 457(b) plan is similar to a 403(b) or 401(k) plan. A 457(b) plan is offered through your employer and is designed to help you save money for retirement.
Also known as a deferred compensation plan, a 457(b) plan is commonly offered to government employees – especially those working for local and state governments.
A few examples of who might have this plan are:
- Government officials
- Police officers
- Emergency medical technicians
- Public school teachers
- Those who work for a city, like sanitation workers
Using this employer-sponsored retirement account, you can contribute pre-tax dollars. Also, you won’t pay taxes on that money until you withdraw it, usually during retirement. In this way, your contributions can grow tax-deferred until withdrawals are taken.