A 457(b) plan is a retirement financial savings car obtainable to staff of state and native governments, in addition to sure tax-exempt organizations. Contribution limits are established yearly by the IRS. For people aged 50 and over, there’s typically a provision permitting for extra contributions past the usual restrict, often called “catch-up” contributions. The utmost quantity a person on this age group can contribute to a 457(b) within the specified 12 months relies on these IRS pointers.
Understanding the allowable contribution quantities is essential for retirement planning. Maximizing contributions, particularly when eligible for catch-up provisions, can considerably improve retirement financial savings. These plans provide a priceless device for public sector and non-profit staff to safe their monetary future, supplementing different retirement revenue sources. The historic context entails steady changes to contribution limits to replicate inflation and evolving financial circumstances.
