The 457(b) plan is a tax-advantaged retirement financial savings plan for workers of state and native governments and sure tax-exempt organizations. Contributions to a 457(b) plan are made on a pre-tax foundation, which means that they’re deducted out of your paycheck earlier than taxes are calculated. This reduces your present taxable earnings and might prevent cash on taxes.
The utmost quantity that you could contribute to a 457(b) plan in 2025 is $22,500. This restrict is ready by the Inside Income Service (IRS) and is adjusted every year for inflation. Along with the common contribution restrict, you might also have the ability to make catch-up contributions in case you are age 50 or older. The catch-up contribution restrict for 2025 is $7,500.
