457(b) Calculators
Our specialized 457(b) calculators are designed to simplify the financial aspect of retirement. The 457(b) Savings Calculator helps you project the growth of your retirement plan based on your contributions, employer matching, and expected annual returns. This tool is ideal for understanding how your retirement savings can grow and evolve. On the other hand, our 457(b) Payout Calculator provides insights into how you can strategically withdraw from your 457(b) during retirement using annuities.
457(b) Payout Calculator
Use our 457(b) payout calculator to see how much contractually guaranteed yearly income you can receive from an annuity for the rest of your life using your balance at the time of your retirement.
To use the calculator, simply:
- Enter your age.
- Input your resident state.
- Input your current 457(b) retirement plan balance,
- When would you like your payments to begin (Start My Benefits)?
457(b) Savings Calculator
Our 457(b) savings calculator is designed to provide you with clear projections of how your investments will mature based on your initial amount, contribution frequency, and interest rates.
Input your annual salary, the percentage you would like to contribute, any projected salary increases, your current age, the age you wish to retire, and the projected rate of return. You can also add any employees who match your criteria who are available. The calculator will then display your projected savings amount at the age you wish to retire.
457(B) Withdrawal Comparison
Historically, financial advisors have recommended withdrawing 4% from your retirement plans and adjusting for inflation. However, the 4% rule has been debunked as a safe withdrawal rate. New research concludes that the new rule is as low as 2.8%. The following table compares rolling your 457(b) into a new annuity with a guaranteed lifetime withdrawal benefit.
| Features | Annuity | 457(b) | IRA | Roth IRA |
|---|---|---|---|---|
| Withdrawal Percentage | 5.20% – 6.55% | 4% | 4% | 4% |
| Can Income Increase? | Yes | Yes | Yes | Yes |
| Can Income Decrease? | No | Yes | Yes | Yes |
| How Long Will Money Last? | Lifetime | 30 Years+ | 30 Years+ | 30 Years+ |
| Annual Fees | 0 – 1.50% | 1% – 4% | 1% – 4% | 1% – 4% |
| Taxation | Taxable/Tax-Free | Taxable | Taxable | Tax-Free |
| Death Benefit | Account Balance | Account Balance | Account Balance | Account Balance |
Example: A 60-year-old retiree starts withdrawing immediately from their $1 million portfolio; they would receive:
457(b) Plan Basics
A 457(b) is a tax-advantaged retirement plan for many state and local government workers and certain nonprofit employees. You contribute directly from your paycheck—often pre-tax—and your money can grow tax-deferred (or tax-free later if your plan offers a Roth 457(b)). The big advantages are high contribution limits, flexible catch-ups near retirement, and—if it’s a governmental 457(b)—the ability to access funds after you leave your job without the 10% early-withdrawal penalty.
Who a 457(b) Is For
- Employees of state and local governments (police, firefighters, teachers, city/county staff)
- Workers at certain tax-exempt organizations with eligible 457(b) plans
Governmental vs. Non-Governmental 457(b)
- Non-governmental 457(b): Assets are an employer liability (not in a qualified trust); rollovers are generally restricted (often only to another similar 457(b)); distribution options can be limited.
- Governmental 457(b): Held in a trust for participants; typically allows rollovers to IRAs/401(k)/403(b) after separation; no 10% early-withdrawal penalty after separation.
How Contributions, Taxes, and Catch-Ups Work
Contributions
- Pre-tax deferrals reduce your taxable income today; withdrawals are taxed later.
- Roth (if available) contributions are after-tax; qualified withdrawals in retirement can be tax-free.
- Some employers may contribute, but all money—employee and employer—counts toward the same annual 457(b) limit.
Catch-Up Options
- Age-50 catch-up (if your plan offers it): Eligible savers can contribute more each year after age 50.
- Special “3-Years-to-Retirement” catch-up: In the three taxable years before the plan’s normal retirement age, you may be able to contribute up to double the standard limit—capped by your unused allowable deferrals from prior years. You cannot use both catch-ups in the same year.
Withdrawals and Taxes
- Roth 457(b): Qualified withdrawals can be tax-free if you meet the plan’s rules (e.g., 5-year clock and age requirements).
- Separation from service: Governmental 457(b)s allow withdrawals at any age with no 10% early-withdrawal penalty once you leave the employer (income taxes still apply).
- Required minimum distributions (RMDs): Apply to traditional balances in retirement unless you roll to a Roth IRA.
Talk With an Independent Expert
Want help choosing pre-tax vs. Roth, verifying catch-up eligibility, or designing a rollover and income plan? Call 770-755-1565 or request free quotes and a personalized plan. At The Annuity Expert, we’re an independent retirement planner and insurance agency that compares top carriers so you don’t overpay—and we’ll only recommend annuities or life insurance if they truly improve your outcome.
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Questions From Our Readers
How much should I put into a 457(b) plan?
The amount a participant can contribute to their 457(b) plan annually cannot exceed either 100% of the participant’s taxable compensation or the elective deferral limit ($24,500 in 2026).
What happens if I contribute too much to my 457(b) plan?
If you defer too much compensation into an eligible deferred compensation plan, you may jeopardize the plan’s status under IRC Section 457(b) unless you act quickly to correct the issue.
When can I withdraw from my 457(b) without penalty?
With a 457 account, you can withdraw without being penalized at any age. However, if you try to withdraw money from other retirement savings plans before reaching the minimum age (55 or 59½, depending on the plan), you will be charged a 10% penalty.
Can I withdraw from my 457(b) to buy a house?
You cannot withdraw money from a 457 plan at any point for any reason until you leave employment.
How much tax will be withheld from my 457(b) withdrawal?
Suppose you take an eligible rollover distribution from your governmental 457(b) plan. In that case, the government will withhold 20% of the distribution for income taxes unless you directly roll it over into another governmental 457(b) plan, IRA, 403b plan, or qualified plan. This is because withdrawals from 457 retirement plans are taxed as ordinary income; however, distributions from a ROTH 457 Plan are not subject to taxation.
Is a Roth IRA better than a 457(b)?
Your Roth IRA will be most beneficial if tax rates increase when you retire, as your withdrawals would be tax-free. However, if taxes lessen when you retire, your 457 accounts will work more in your favor from a financial perspective. In other words, having both types of accounts can help stabilize things.
What is the average 457(b) balance by age?
The average 457 balance by age varies significantly. Generally, younger individuals tend to have lower balances, while older individuals tend to have higher balances. According to recent data, the average 457 balance for those in their 20s is around $5,000, while those in their 60s have an average balance of around $150,000. These figures are subject to individual circumstances and contributions.
What is the difference between a 457 plan and a 401(k)
The main difference between a 457 and a 401(k) plan lies in eligibility and the specifics of contributions. A 401(k) is typically designed for private sector employees, allowing pre-tax contributions up to IRS-set limits, which grow tax-deferred until withdrawn. Conversely, a 457 is for government and some nonprofit employees, with similar tax benefits but potentially higher catch-up contributions for eligible employees based on their employer’s plan. Both plans tax withdrawals as income.
If I leave my current job, do I need to cash out my 457 plan?
No, you can leave your 457(b) account with your old employer after you leave the job.