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457(b) Plans

What is a 457(b) plan?

A is a retirement savings plan that is typically offered to government employees.

A 457(b) plan is an employer-sponsored, tax-advantaged retirement savings plan that allows employees to contribute pretax dollars. Taxes are charged as the plan holder withdraws funds. Some 457(b) plans may allow plan holders to open Roth accounts to fund their retirement with after-tax dollars instead.

A 457(b) plan largely resembles a 401(k) retirement plan, however, they differ when it comes to the types of employers that offer them. Usually, 457(b) plans are offered by state or local government employers, and 401(k) plans are usually offered by private companies.