Section 457b refers to the Internal Revenue Service section of the tax code that applies to government entities and not for profit organizations tax exempt under 501C code which allows deferred compensation programs. The private sector commonly refers to this as a 401K retirement account. 2012 contribution limits are $17,000 per contributor. A 457b program allows Federal, State and Local agencies a program to have workers a means to save for retirement. Eligible employees will be able to save and invest before tax dollars through voluntary contributions. These contributions are typically a supplement to any other existing retirement plans. Your contributions and earnings will grow tax deferred until the money is withdrawn, withdrawals are subject to ordinary Federal income tax. Your tax bracket can be lower if withdrawn at retirement age which typically will be a lower taxable bracket. Find out what options are available to you when planning your retirement with one of our licensed retirement specialists. You can reach us toll free at 877-775-0812.
