A managing agent at DeRosa and Associates, Chester “C. Edziu” Pacana oversees annuity and insurance agents in both Tennessee and Florida. To ensure that he provides clients with the most informed guidance possible, Chester Pacana has developed deep knowledge about retirement options such as Medicare supplements, FedPlan, and 457(b) plans.
The 457(b) is a retirement savings account only available to employees of local or state government and certain nonprofits. This class includes such professionals as firefighters, police officers, and other kinds of civil servants, as well as those working in hospitals and churches. Union executives may also be eligible for a 457(b). In many ways, it is the same as the 401(k) or the 403(b). The 457(b) is tax-deferred, meaning tax is paid when money is taken out of the plan rather than at the time of contribution, and is eligible for employer matching. As with 401(k)s, withdrawals cannot usually be made from a 457 (b) plan without penalty until the age of 70.5 years, though there is some flexibility to take earlier unpenalized withdrawals from the 457 (b) that does not exist for the 401(k). For instance, individuals who leave their government employer can remove the money from their 457(b) without incurring the 10 percent penalty that is added to early 401(k) withdrawals. Both 401(k) and 457(b) plans also share a personal contribution limit. But 457(b) plans have some added flexibility with it comes to contributions. In general, the maximum annual contribution for both these plans is about $19,000, as of 2019. There is also a slight increase in maximum contributions for individuals aged 50 or older that allows them to add up to $25,000 to their plan. 457(b) plans, however, also have an accelerated savings option for people within three years of average retirement age. During this time, people can contribute up to $36,000 if they haven’t met their contribution limits in previous years.
0 Comments
Leave a Reply. |
AuthorChester Pacana - Experienced Conservative Wealth Management Planner. Archives
July 2019
Categories |