457(b) Plan Calculator

A 457(b) is a tax-advantaged deferred compensation plan offered mainly to employees of state and local governments and some tax-exempt organizations. You defer pre-tax salary (or Roth, if your plan offers it), the money grows tax-deferred, and withdrawals are taxed as ordinary income. The contribution limits mirror a 401(k) or 403(b), but 457(b) plans have their own separate limit and two features the others lack: no 10% early-withdrawal penalty after you separate from service, and a special final-3-year catch-up (IRS).

The employee deferral limit for 2026 is $24,500 for workers under 50. Governmental 457(b) plans add a $8,000 age 50 catch-up (total $32,500) and a SECURE 2.0 super catch-up for ages 60-63 of $11,250 (total $35,750). The special final-3-year catch-up can raise the limit to $49,000, twice the base. Unlike a 401(k) or 403(b), employer contributions count against this same limit (IRS Notice 2025-67).

Correct, and it is the standout feature of the plan. Distributions from a governmental 457(b) after you separate from service are not subject to the 10% early-withdrawal penalty that applies to 401(k), 403(b), and IRA withdrawals before age 59½. You still owe ordinary income tax on the money, but you can tap it at any age once you have left the employer. This makes a 457(b) especially useful for anyone planning to retire early. One caveat: amounts you roll into a governmental 457(b) from a 401(k), 403(b), or IRA keep their own 10% penalty rules, so the exemption applies to your 457(b) deferrals, not to rolled-in money.

Yes, and this is one of the biggest advantages for public-sector and nonprofit workers. The 457(b) limit is separate from the 403(b)/401(k) limit. So in 2026 you could defer up to $24,500 into a 457(b) and another $24,500 into a 403(b), nearly doubling your tax-advantaged contributions to roughly $49,000 (before any catch-ups). Many teachers, healthcare workers, and government employees with access to both plans use them together to accelerate savings.

In each of the three calendar years before your plan's normal retirement age, you may contribute up to twice the standard limit ($49,000 for 2026), but only to the extent you under-contributed in earlier years. If you always maxed out, there is no unused room to catch up on. You cannot use the special 3-year catch-up and the age 50 catch-up in the same year. You take whichever lets you contribute more. The special catch-up is available in both governmental and non-governmental 457(b) plans. Your plan administrator calculates your available catch-up room.

Governmental 457(b) plans (for state and local government employees) hold assets in a trust for your benefit, can be rolled into an IRA or other employer plan when you leave, and offer the age 50 and SECURE 2.0 catch-ups. Non-governmental 457(b) plans (top-hat plans at tax-exempt employers) are technically unfunded. The assets remain the employer's property and are exposed to the employer's creditors. They cannot be rolled into an IRA, only into another non-governmental 457(b), and they do not offer the age 50 or super catch-up. If you have a non-governmental 457(b), understand your employer's financial health before deferring large amounts.

For a governmental 457(b), you can leave the money in the plan, roll it into an IRA or your new employer's 401(k)/403(b)/457(b), or take penalty-free distributions at any age (income tax still applies). For a non-governmental 457(b), your options are narrower: distributions follow the schedule your employer's plan specifies, and rollovers are limited to another non-governmental 457(b). Review your plan document before you separate, because the distribution election for non-governmental plans is often locked in early.

Traditional 457(b) contributions are pre-tax (lower tax bill now, taxable withdrawals later). Roth 457(b) contributions are after-tax (no break now, tax-free qualified withdrawals later). If your plan offers a Roth option and you expect a similar or higher tax bracket in retirement, Roth is often the stronger choice. Public-sector workers with a pension sometimes find their retirement bracket is higher than expected. Our Roth 401(k) calculator models the same Roth versus Traditional trade-off.