How can you use a 457 Retirement Plan Account

King bell

VIP Contributor
Most people are familiar with 401(k) retirement accounts, but not everyone knows about 457 retirement accounts. A 457 account is a tax-advantaged account that can be used by state and local government employees, as well as some nonprofit employees.

There are a few key benefits of a 457 account that make it worth considering. First, your contributions to a 457 account are made on a pretax basis, which means they are not subject to income tax. This can lead to significant tax savings, especially if you are in a high tax bracket.

Second, the money in your 457 account can be invested and grow tax-deferred. This means that you won’t have to pay taxes on any investment gains until you withdraw the money from the account.

Finally, you may be able to access your account funds earlier than you could with a 401(k) account. In some cases, you can withdraw the money without penalty if you leave your job before retirement age.

If you’re eligible to open a 457 account, it can be a great way to boost your retirement savings. Be sure to talk to your financial advisor to see if a 457 account is right for you.
 
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