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Employment Benefits

457(b) Non-Governmental Deferred Compensation (Double 401(k) Space)

Public sector + qualifying nonprofit employees stack a 457(b) alongside their 403(b)/401(k) — 2× annual deferral space.

Overview

State/local government employees and select 501(c) nonprofits can contribute to a 457(b) plan IN ADDITION TO a 403(b)/401(k), each up to $23K/yr (2024). Total: $46K/yr in pre-tax deferrals. 457(b) also has (1) no 10% early withdrawal penalty (unique advantage), (2) 'final 3 years' catch-up up to $46K if under-contributed prior years, (3) age 50 catch-up $7.5K on top. Governmental 457(b) is protected by trust (safe from creditors); nonprofit 457(b) is not (top-hat plan).

Best fit
Government employees (federal, state, local)Doctors at nonprofit hospitalsTeachers, professors, first responders
Estimated impact
$23K/yr additional pre-tax + no early-withdrawal penalty

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