403(b) and 457(b) Plan Comparison Chart

  • Features
    403(b) Plan
    457(b) Plan
    Additional Comments
  • Eligibility & Participation
    Benefited employees are eligible to participate upon employment.
    Benefited employees are eligible to participate upon employment.
     
  • Fees
    Fees differ by vendor and by fund.
    Fees differ by vendor and by fund.
    Research and talk to Vendor(s) to make sure you understand all fees before investing in funds.
  • Taxability
    Account is taxable at your current taxable rate when distributed.
    Account is taxable at your current taxable rate when distributed.
     
  • Employee Contributions
    Up to $18,000 in 2016
    Up to $18,000 in 2016
    Can contribute up to maximum in both plans, or $36,000 total.
  • Age 50 Catch-up
    Additional $6,000 in contributions allowed for those ages 50 or older.
    Additional $6,000 contributions allowed for those ages 50 or older.
    Employees are eligible for the age-50 catch-up in both plans.
  • Investment Changes
    Each vendor determines how often changes are allowed and what fees may apply.
    Each vendor determines how often changes are allowed and what fees may apply.
    Inquire with vendor about moving funds between investment options and between vendors.
  • Account Withdrawal
    Upon separation of employment, age 59 ½, early retirement at age 55 or older, disability, death, or qualified reservist distribution. Hardship and loan withdrawals available.
    Upon severance from employment or retirement. Hardship withdrawals allowed.
     
  • Early Withdrawal Penalty
    10% penalty on withdrawals if you are under age 59 ½. (Exception if you separate from service at age 55 and retire, or become disabled, or die).
    None.
     
  • Rollovers Out
    Permitted to IRA, 401(a), 401(k), 457(b) public and other 403(b) plans.
    Same as 403(b) – then will be subject to new plan rules (10% penalty on early withdrawals).
     
  • Loans
    Up to two loans allowed on your account at anytime; maximum allowed is 50% or your account balance or $50,000
    Not Available.
     

This chart is for summary purposes only. For more information, contact the Internal Revenue Service at 1-800-829-4477 or www.irs.gov. For advice or further information regarding retirement planning, contact a financial advisor or tax expert. Make sure you carefully research each vendor and investment options before enrolling in a voluntary retirement plan.

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