457(b) Retirement Plans: The Ultimate Guide

In this video we go through the ins and outs of the powerful 457b retirement plans. These plans have some unique features that make them especially valuable for early retirement.

Timestamps:
0:00 The Powerful 457b Retirement Plan
0:25 What is a 457b Plan?
0:43 The 2 Types of 457 Plans
1:06 Who Has Access to Governmental 457b Plans?
1:21 The Tax Treatment of Traditional 457b Contributions
1:38 Roth 457b Contributions
1:54 457b Contribution Limits
2:30 457b Employer Matching Contributions
3:19 457b Required Minimum Distributions (RMDs)
3:58 Investing in a 457b Account
4:19 First Advantage of 457s over 401ks
4:52 A Caution about 457b Rollovers
5:02 A Caution about Roth 457bs
5:30 Second Advantage of 457s over 401ks
6:03 How To Prioritize 457b contributions
6:34 Adding a 457b to Your Financial Plan

Disclaimer:
Trek Wealth Planning, LLC is an Investment Advisor registered with the States of Missouri and Kansas. This video is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions.

[squesada]

I'm 54 and have a government 457B. My deferred comp told me only my contributions counted toward my 30, 500 Cap. My employer and my union match some of contributions. You mentioned with 457B all contributions count towards my 30, 500 cap. I'll have to double check again with my deferred comp. That's concerning. Thanks

[TheReviewPigeon]

no match, the reason i got was "we already offer you a pension" as to why they don't match.

[wskim]

I have 401a 457b and SEP IRA. How much can I contribute annually together?

[dustyvanbrocklin]

I half my raise every time to put in my 457. I will be maxed in two years.

[charmcrypto]

That tax planning flexibility sounds awesome. For those of us without that option, anyone tried other ways to diversify retirement accounts? I've been dipping my toes into crypto with My Digital Money's platform. It's been surprisingly straightforward, but I'm still on the fence about how much to allocate. What's your take on balancing traditional and alternative investments for retirement?

[EvilGenius]

Hmm, not sure about the limit of making catch-up contributions to only one plan; the IRS has a page that gives examples for an individual in 457(b) and 403(b) plans and says w.r.t catch-ups "If you're age 50 or older in a governmental 457(b) plan: $26, 000 to each plan if both plans allow age-50 catch-ups ($6, 500 additional in 2021)" [Notably they are using 2021 numbers, even though they say the page was Reviewed or Updated 29-Feb-2024.]

I know it's niche, but would love to see a video on some of the 457(b) edge cases. In my case I'm specifically interested in what can happen to a governmental Roth 457(b) if it's rolled into a Roth IRA and how that factors into the contribution basis for calculating early withdrawals. I guess it's fairly academic though, I'm unlikely to retire before ~58 and I should have a few years to switch to traditional 457(b) contributions to fund the gap months.

[bryan]

Indid NOT know about the withdrawls being taxed if before 59.5 yo! Does that apply to gains AND contributions?