What are the exceptions for governmental 457 plans?
What are the exceptions for governmental 457 plans? There are exceptions for governmental deferred compensation plans. In this episode of Ask the Hammer, Jeffrey discusses the unique exceptions for people who work for government agencies.
Key Takeaways
- Governmental 457(b) plans allow penalty-free withdrawals at any age, but this exemption applies only to money originally deferred through the 457(b), not to rolled-over IRA funds
- Rolling outside retirement funds (like IRA money) into a 457(b) is permitted if your plan allows it, but those rolled funds retain the standard 59½ age requirement and 10% penalty for early withdrawal
- Only governmental 457(b) plans (not nonprofit 457 plans) are eligible for rollovers; non-qualified deferred compensation plans from nonprofits cannot be rolled into IRAs or other retirement accounts
- Government workers may have access to dual deferral limits—both a 403(b) limit and a separate 457(b) deferred compensation limit—allowing them to save more than typical employees
- 457(b) plans contain only your deferred salary contributions; employers do not make matching contributions to these plans, unlike 401(k)s or 403(b)s
What are the exceptions for governmental 457 plans? There are exceptions for governmental deferred compensation plans. In this episode of Ask the Hammer, Jeffrey discusses the unique exceptions for people who work for government agencies. Watch more Ask The Hammer episodes at this link: https://www.finstream.tv/videos/ask-the-hammer/
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