The plan is made available to employees who work for the state or local government. The 457(b) plan is the most commonly used one. If they opt for the pre-tax contributions version, the plan money is not taxed until the employee withdraws the money. If they choose the latter, the account compounds tax-free, essentially the same as a Roth IRA. They can choose to make contributions on either a pre-tax or an after-tax basis. Employers provide the plan to employees who then contribute portions of their salary into the plan. The 457 plan is offered to those who work for the government, though some non-governmental (non-profit) employees may also be offered the plan. A 457 plan differs in several key ways from a 401(k) plan, including who is offered the plan, being considered qualified or non-qualified, and penalties for cashing out early.There are two types of 457 plans 457(b) plans are offered to employees that work for the state or the government and are the most common plans 457(f) plans are offered to highly compensated government – and some non-government – employees.
A 457 plan is provided by government and local state organizations (and some non-profit organizations), allowing employees to contribute portions of their salary into a tax-advantaged, non-qualified retirement vehicle.457 plans are offered by state and local government employers, as well as certain non-profit employers. The plan is non-qualified – it doesn’t meet the guidelines of the Employee Retirement Income Security Act (ERISA). The 457 Plan is a type of tax-advantaged retirement plan with deferred compensation.
0 kommentar(er)
