A 457b plan is a deferred compensation plan set up by state and local governments and tax-exempt employers to assist their employees in saving for retirement. Employees make salary-deferred contributions and earnings grow on a tax-deferred basis until the money is withdrawn from the plan. There are two different types of 457b plans. One is for government employees such as state and local workers, teachers and firefighters and the other is for highly compensated employees of non-profit corporations such as hospitals, unions and charitable groups.
There is a maximum amount an employee can contribute to a 457b plan but, an investor can have both a 457b plan and a 40k or a 403b account. He or she could make the maximum contribution to both accounts to maximize the investment. 457b plans are not governed by the same laws that created the 401k and 403b plans so it is important to talk to an investment professional before opening such an account.
Call 419-475-8665 or fill out our on-line request form for more information or to schedule an exploratory appointment with our experienced professionals at Savage & Associates.