Here you can find 6 valuable things about A 457 retirement plan that is pertinent for you to know if you’re participating in this plan or going to use it.

1. How much you can contribute on a Tax-Deferred Basis?

It is possible for you to contribute the littlest of $15,500 or 100% of compensation. You can contribute an additional $5,000 to make a total of $20,500 if you’re eligible for catch-up contribution.

2. How are the contributions invested?

A lot of 457 plans offer both fixed and variable investment options. The money you contribute is invested at your direction in one or more of a variety of investment options offered by the plan. The fixed options, which are through bank and insurance company products, guarantee principal and interest.

3. When you can withdraw the money you have in your 457 retirement plan?

Withdrawals are subject to ordinary income taxes.

You can withdraw the money upon:

A. Your retirement

B. When you reach the age of 70?

C. Termination of service

D. Your encountering of emergency

E. In the case of your death

4. When you are required to withdraw your money?

You start to get benefit payments from your account the later of April 1 of the calendar year following the calendar year in which you reach the age 70?, or separate from service with your employer who sponsors your plan

If you fail to begin withdrawing as is required, it would subject you to IRS penalties equal to 50% of the amount that should have been beneficiary.

Read more about 401k withdrawal penalty here.

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