A tax-exempt deferred compensation program made available to employees of state and federal governments and agencies. A 457 plan is similar to a 401(k) plan, except there are never employer matching contributions and the IRS does not consider it a qualified retirement plan. Participants can defer some of their annual income (up to an annual limit), and contributions and earnings are tax-deferred until withdrawal. Distributions start at retirement age but participants can also take distributions if they change jobs or in certain emergencies. Participants can choose to take distributions as a lump sum, annual installments or as an annuity. Distributions are subject to ordinary income taxes and the amounts cannot be transferred into an IRA.

This content can be found on the following page:

Copyright©1997-2009 by InvestorWords.com. ALL RIGHTS RESERVED.

Reproduction of all or part of this glossary and/or this page, in any format, without written consent is prohibited. If you have questions about this dictionary please feel free to contact us feedback\@\investorguide.com

• email
• print
• cite
•  link
• translate
• share

Copy and paste this HTML in your website to link to this page    <a href="http://www.investorwords.com/14/457_plan.html">457 plan</a>

Select language... Chinese Japanese Spanish German French Portuguese Korean Italian Russian More languages...

powered by

Please select a language.