Should I contribute to both 403b and 457b?

Many universities and colleges offer access to both a 403(b) plan and a 457 plan. A question I get often is, “Can I contribute to both a 403(b) and 457 plan?” The answer is yes. If your employer offers both, you can contribute to (and max out) both.

Is 457 B better than 401k?

If your employer offers a match on the 401(k), it behooves you to contribute at least up until the match. Even if you expect to retire early, paying a 10% early withdrawal penalty on a 100% free match is still a good deal. Otherwise, those with plans for an early retirement ought to favor the 457.

Can I contribute to 401k and 403b and 457?

If the 457 plan is the only retirement plan your company offers then the limits are the same as they would be with the 401k or 403b. However, if your employer offers BOTH a 401k/403b and a 457, you may contribute the maximum amount to both plans.

Is a 403b or 457 B better?

If you need more time to put aside money for retirement, a 457 plan is best for you. It has a better catch-up policy and will allow you to stash away more money for retirement. A 403(b) is likely to be your best bet if you want a larger array of investment options.

What is better 403b or 457b?

Is a 457b a good idea?

Typically, you end up paying the tax when you take the money out to spend it, normally in retirement. This means that by using a 457(b) you may save on taxes for your retirement savings. This is especially true if you expect to be in a lower tax-bracket in retirement, as many retirees are.

Is 403b or 457 better?

• The 403(b) has a much higher limit than the 457(b), which lacks a separate contribution limit for employers. 457(b)s only allow $20,500 in contributions from any source in 2022, whereas 403(b)s allows total contributions of $61,000, including $20,500 from an employee.

What are the downsides to a 457b?

Cons of 457(b) plans:

  • Fewer investing options than 401(k)s (Not as common today)
  • Only available to certain employees employed by state or local governments or qualifying nonprofits.
  • Employer contributions count toward the annual limit.
  • Non-governmental 457(b) plans are riskier.

Is a 457 B plan a good idea?