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The 457 plan is a type of non-qualified, tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre-tax basis.A 457b plan provides you with the ability to save for retirement. 
  • Ability to reduce your taxable income. You determine the amount of your 457b contributions (up to IRS-defined limits) through a participation agreement with your employer. Your contributions will be pre-tax, reducing your current taxable compensation. If your employer is a governmental entity, the 457b plan may also permit you to contribute on a Roth after-tax basis.  
  • Your investment earnings grow tax-deferred. The earnings in your account are reinvested where they grow tax deferred. If your 457b plan is sponsored by a governmental employer, amounts typically are subject to income tax when withdrawn from the plan. Special rules apply to withdrawals from a Roth 457b plan. If your 457b plan is sponsored by a nonprofit organization, withdrawals are subject to income tax when they are paid or made available to you.
  • Choose from a menu of investment funds. Typically, the plan will permit employees to select investment funds offered under it. Diversify your investments for the mix of growth and safety you feel most comfortable with. 
  • Portability. If you leave your job and your 457b plan is sponsored by a governmental entity, you may be able to roll your 457b account into another employer’s eligible retirement plan, traditional IRA or Roth IRA. You also have the option leave your money in your Plan or cash out. If you cash out, the distribution will be subject to income tax.
Features unique to a 457b plan to consider:
  • Catch-up contributions. If you are a longer service employee, you may be able to contribute beyond the general IRS limits. If you are at least age 50 and your 457b plan is sponsored by a governmental entity, you may have another catch-up contribution available.
  • Withdrawals from your 457b account (other than any rollover contributions made to a 457b plan sponsored by a governmental employer) are not subject to the IRS 10% premature distribution penalty tax. 
Suitable For
  • Employees who are looking for additional opportunities for retirement savings through a supplemental plan offered by their governmental or tax-exempt employer.    
Additional DetailsThis material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. We recommend that you consult an independent legal or financial advisor for specific advice about your individual situation.
The tax information herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
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McAllen Office 
3200 N. 23rd Street
McAllen, TX 78501
Phone: 956-687-1717
Fax: 877-532-0351
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Agent Portal
  • About Us
  • Value Added Service
    • Benefit Bank
    • Enrollment Platform
    • Retirement Options >
      • 401 (k)
      • Annuities
      • 403 (b)
      • 457
      • Indexed Life
    • HR Resources
    • Compliance
    • Web Design
  • Employee Benefits
    • Health
    • Gap
    • Disability
    • Life Insurance
    • Supplemental
    • Dental
    • Vision
  • P&C
    • Auto
    • Home
    • General Liability
    • Workers Comp
    • Builders Risk
    • Commercial Auto
    • Recreational
    • Umbrela
  • Videos
    • Rule of 72
    • Impact of taxes
    • Living Benefits
    • Need to invest early
    • Basics Indexed
    • Money 101 Invite
    • Recruiting video
    • Cap1
    • Wellness
  • Contact Us
  • Agent Information
  • Blog
  • Agency Presentation
  • Money101
  • Agent portal