457(b) Calculator

A 457(b) has two things no 401(k) has — a limit that doesn't share with your 403(b), and no 10% penalty after you leave. Both are modelled here.

If you work for a school district, a city, a public hospital or a state university, you may be offered a 457(b) alongside a 403(b) and told they're much the same thing. They aren't. Two of the differences are worth real money and most people offered both never use either properly.

The limits don't share, and that's the whole opportunity

A 401(k) and a 403(b) draw on the same $24,500 ceiling under IRC §402(g). Hold both and you still only get one allowance between them.

A 457(b) sits outside that. Its limit comes from §457(e)(15), which happens to point at the same dollar figure but is a separate ceiling. So someone offered a 403(b) and a governmental 457(b) can defer $24,500 to each in the same year, before any catch-up at all.

That's the largest block of tax-deferred room available to anyone in ordinary public-sector employment. It goes unused constantly. Usually nobody has explained that the second plan isn't a duplicate of the first. The 403(b) side has its own quirk, a catch-up for long service that no other plan type offers.

No 10% penalty, and that changes what the account is for

Take money out of a 401(k) before 59½ and you normally pay the 10% additional tax under IRC §72(t) on top of income tax, unless one of the statutory exceptions covers you.

A governmental 457(b) is outside that rule. Once you've separated from service, a distribution is taxed as ordinary income and nothing else, at any age. Not 59½, not 55. Any age.

For someone planning to stop work at 55 or 58, that's not a technicality; it's the difference between an account you can spend and one you can't touch without a penalty. It makes a 457(b) the natural place to hold the money you expect to need first, and it's an argument for filling it before the 403(b) if you can only fill one.

One carve-out sits on top. The IRS chart of exceptions notes that amounts rolled into a 457(b) from another plan type or an IRA keep their own treatment, so rolling an old 401(k) in doesn't launder it past the penalty. The exceptions that do apply to a 401(k) are listed in full here, and the rule of 55 is the one most people need.

The special catch-up is worth reading your plan document for

Every plan type has an age-50 catch-up, and SECURE 2.0 raised it to $11,250 for the years you are 60 to 63 in a governmental 457(b) exactly as it did in a 401(k). A 457(b) has a second catch-up on top of that one. It runs on a completely different principle.

In the three years before the plan's normal retirement age, §457(b)(3) lets you contribute the lesser of twice the annual limit, or the annual limit plus every dollar of allowance you failed to use in earlier years. It exists to let people who couldn't afford to contribute in their thirties reclaim that room later.

Two conditions catch people. The window runs against the plan's normal retirement age, which your 457(b) document defines and which need not be the age you actually intend to stop. And you can't stack it with the age-50 catch-up in the same year. Whichever is larger, that's the one you get.

The unused-allowance figure is also not something you can reconstruct from memory. Your 457(b) administrator holds it. Asking for that number is the single most useful thing anyone within three years of the window can do.

How do you work out the special 457(b) catch-up?

Compare two ceilings and take the smaller: twice the annual limit, or the annual limit plus every dollar of allowance you left unused in earlier years. Five steps. The figures are the ones the form above opens with, and the rule itself is §457(b)(3).

1. Check the window before anything else. With the plan's normal retirement age set to 65, the qualifying years are 62, 63 and 64. The form opens at age 60, two years short of them, so nothing applies yet.
2. Write down the annual limit: $24,500 for 2026, the §402(g) figure that §457(e)(15) points at.
3. First limb, twice the annual limit. That's $49,000.
4. Second limb, the annual limit plus your unused allowance. On the $40,000 in the box that comes to $64,500.
5. Take the lesser. $49,000 wins, and that is the ceiling for the whole year, catch-up included.

Now the part that catches almost everyone.

$49,000 is the entire allowance and not an extra sum bolted on to $24,500, so the catch-up itself is the difference between them, another $24,500 on top of the ordinary limit. Then check it against the catch-up you'd otherwise get, because only one of the two is available in a year: at 62 the age 60–63 route would allow $35,750, which is smaller, so the special catch-up is the one to take. And §457(b)(2) holds the lot to 100% of includible compensation, which on the $78,000 salary in the form doesn't bind, though it would for anyone trying to defer more than they earn.

A non-governmental 457(b) is a different animal

Here the picture changes. A non-governmental 457(b) isn't a straightforwardly good deal, and the difference deserves more attention than it usually gets.

If your employer is a tax-exempt organisation and not a government, the money in your 457(b) isn't held in trust for you. It stays an asset of the employer and an unsecured promise to you, which means it remains reachable by the employer's creditors until it's actually paid out. If the organisation fails, you're a general creditor standing in line.

The same plan type also loses the age-50 catch-up entirely, and the balance can't be rolled into an IRA or a 401(k) when you leave, only into another non-governmental 457(b) willing to accept it. Distribution timing is usually fixed by an election you make well in advance and can rarely change.

That doesn't make it a bad account. It makes a non-governmental 457(b) an account you judge on your employer's balance sheet rather than on the tax break. That's an odd thing to have to do about a retirement plan, and it's the reason this page separates the two cases so firmly.

Everything else works the way a 401(k) does

Contributions are pre-tax, or Roth if the plan offers a designated Roth account. Growth isn't taxed inside the plan. Distributions of pre-tax money are ordinary income, and required minimum distributions start at 73 or 75 depending on the year you were born, using the same table. Nothing about that is special here. The required distribution is the same calculation.

Growth works the same way too, which is why the 401(k) calculator this site is built around will project a 457(b) balance with nothing changed. Only the separate limit and the missing penalty needed a page of their own.

The annual figures come from the same IRS notice each autumn, so when the 401(k) limit moves, this one moves with it.

Every ceiling, with the code section behind it. And if the whole architecture is new to you, how a 401(k) works covers the shared ground first.

Frequently asked questions

What is the 457(b) contribution limit?

$24,500 for 2026, which is the same figure as the §402(g) limit that governs a 401(k) or a 403(b), because §457(e)(15) points straight at it. A governmental plan may add the $8,000 age-50 catch-up, stepping up to $11,250 in any year you are 60 to 63. The limit is also capped at 100% of your includible compensation, which only binds at low pay.

Can I contribute to both a 457(b) and a 403(b) in the same year?

Yes, and that's the whole point. A 457(b) deferral doesn't count against the §402(g) limit that covers a 401(k) or 403(b), so someone offered both can defer the full amount to each. That's $24,500 twice over before any catch-up.

What is the special 457(b) catch-up?

In the three years before the plan's normal retirement age, §457(b)(3) lets you contribute the lesser of twice the annual limit, or the annual limit plus every dollar of allowance you failed to use in earlier years. It exists so people can reclaim room they never took. You can't use it and the age-50 catch-up in the same year.

Is there a 10% penalty on early 457(b) withdrawals?

Not on a governmental 457(b). Distributions after you separate from service are outside the 10% additional tax whatever your age, which no 401(k) can offer. The IRS chart carries one carve-out: amounts rolled into the plan from another plan type or an IRA keep their own treatment.

What is the difference between a governmental and a non-governmental 457(b)?

Security, mostly. A governmental plan holds your money in trust for you. A non-governmental plan at a tax-exempt employer is an unsecured promise, and the balance remains reachable by the employer's creditors until it's paid. It has no age-50 catch-up either. And it can't be rolled to an IRA.

Do 457(b) plans have required minimum distributions?

Yes, on the same schedule as a 401(k): from 73 or 75 depending on the year you were born, using the same Uniform Lifetime Table. The absence of a 10% penalty affects when you may take money out, not when you must.

Where these rules come from

The plan types, the annual limit and both catch-ups are set out on the IRS pages for IRC 457(b) deferred compensation plans and 457(b) contribution limits. The special catch-up ceiling is IRC §457(b)(3). The treatment of governmental 457(b) distributions under the 10% additional tax is in the IRS chart of exceptions to tax on early distributions. Your plan document decides what your plan actually offers, and it can be stricter than the law in every respect.