457 Calculator: Estimate Your Savings And Income In Retirement

Are you looking to retire soon? If so, you’ll need to start planning. One crucial factor to consider is your 457 savings. How much money will you have available each month in retirement? Use our free 457 calculators to estimate your savings and income in retirement. This tool is easy to use and can help you make informed decisions about your future.

457 Savings Calculator

Use our 457 savings calculator to estimate your retirement savings. Input your annual contribution limits, maximum employer matching contributions, and assumed annual rate of return.

What Is A 457 Plan?

A 457 retirement savings plan is available to eligible employees, such as government workers and some non-profit organizations. With this plan, contribution occurs on a pre-tax basis, which allows employees to defer paying taxes on their contributions until they withdraw the funds from the plan. This tax advantage is one of the many benefits of a 457 plan for employees looking to maximize their retirement savings.

The maximum contribution limit for a 457 plan is typically higher than that of a traditional 401k plan, allowing specific maximum total contributions to be made. This can be advantageous for employees who want to save more for retirement. In addition, some 457 plans offer exceptional catch-up contributions for employees nearing retirement age who have not saved enough.

Withdrawals from a 457 plan are subject to income tax, but if the employee waits until retirement age to withdraw the maximum percent of the funds, they may be in a lower tax bracket and pay less in taxes overall. Some 457 plans also allow for penalty-free withdrawals in certain circumstances, such as an unforeseen emergency or severe financial hardship. Additionally, some plans may offer maximum employer matching contributions, providing even more incentive for employees to save for retirement through a 457 plan.

What Is A 457 Savings Calculator?

A 457 savings calculator is a tool that helps you estimate how much money you could save, taking into account factors like your current salary, maximum annual contributions, and the number of years you plan to save. The calculator considers several factors, such as your current salary, the amount you plan to contribute to the plan each year, and the number of years you plan to save.

Using a 457 savings calculator can be helpful in several ways. It can help you:

• Determine how much you must save yearly to reach your retirement savings goals.
• Compare different scenarios, such as increasing your contribution rate or delaying retirement, to see how they impact your savings.
• Estimate the tax savings you could receive by contributing to a pre-tax 457 plan.
• Plan for retirement by seeing how your savings will grow over time.

How Does The Calculator Work?

A 457 calculator is a tool that helps you estimate how much money you can save in a 457 retirement plan. Here’s how it works:

• Input your current age: This helps the calculator determine how long you have until retirement.
• Input your current salary: This helps the calculator estimate your future earnings.
• Input your contribution rate: This is the percentage of your salary you plan to contribute to the 457 plan.
• Input the employer match: Some employers offer a matching contribution to the 457 plan. If your employer offers a match, input the percentage or dollar amount here.
• Input the expected annual rate of return: This is the average rate of return you expect to earn on your 457 plan investments.
• Input your expected retirement age: This helps the calculator determine how many years your savings will have to grow.
• Input your expected retirement income: This is the money you will need annually.

Once you have input all the necessary information, the 457 calculators will estimate how much money you will have saved by the time you retire.

457 Withdrawal Calculator

As retirement age approaches, many people worry about how they will withdraw from their retirement savings plan. One option that can provide peace of mind is an annuity with a guaranteed lifetime withdrawal benefit (GLWB).

An annuity is an insurance policy that guarantees to distribute a paycheck to you for the rest of your life, even after the 457-employee savings plan runs out of money. This can provide much-needed security in retirement, knowing that you will have a regular income stream no matter what happens with your other retirement savings. In addition, an annuity can help to automate the retirement withdrawal process for 457 savings plans, making it one less thing you have to worry about.

So, if you are approaching retirement age and are wondering how to best withdraw from your retirement savings, an annuity with a GLWB may be worth considering.

Note: You can purchase an annuity (with no tax penalties) with your 457(b) deferred compensation plan, 401k, IRAs, retirement accounts, investments, and cash.

457(b) Withdrawal Comparison

Historically financial advisors recommend withdrawing 4% from your 457(b) plan and adjusting for inflation. However, the 4% rule has been debunked as a safe withdrawal rate. New research concludes as low as 2.8% is the new rule. The following table compares rolling your 457 into a new annuity with withdrawing income yourself or utilizing an advisor.

Example: A 60-year-old retiree starts withdrawing immediately from their $1 million portfolio, they would receive:

• Annuity: Between $52,000 and $61,000
• 401k: $40,000
• IRA: $40,000
• Roth IRA: $40,000

What Is A 457 Withdrawal Calculator?

A 457 withdrawal calculator is a tool that helps you estimate the taxes and penalties associated with withdrawing money from a 457 retirement plan before retirement age. In general, withdrawing money from a 457 plan before age 59 ½ can result in a 10% early withdrawal penalty and income taxes on the withdrawn amount.

Using a 457 withdrawal calculator can be helpful in several ways. It can help you:

• Estimate the taxes and penalties you may owe if you need to withdraw early from your 457 plan.
• Compare the costs of withdrawing money from your 457 plan versus taking a loan from the plan, which may be subject to different rules and fees.
• Plan for retirement by understanding the impact of early withdrawals on your retirement savings.

To use a 457 withdrawal calculator, you will typically need to input information such as the amount you plan to withdraw, your current age, and a percentage of your annual tax bracket. The calculator will then estimate the taxes and penalties you may owe on the withdrawal.

What Is The Difference Between A 457 Plan And A 401k?

The main difference between a 457 and a 401k plan is the employee’s contributions and who is eligible to participate.

A 401k plan is a type of retirement plan typically offered by private companies to their employees. Any employee who meets the eligibility requirements can contribute to a 401k plan on a pre-tax basis up to the annual contribution limit set by the IRS. After that, the money in the plan grows tax-free until it is withdrawn, at which point it is taxed as income.

A 457 plan, on the other hand, is a type of deferred compensation plan typically offered to government employees and some non-profit employees. Eligible employees can contribute to the plan on a pre-tax basis up to the annual contribution limit set by the IRS. After that, the money in the plan grows tax-free until it is withdrawn, at which point it is taxed as income.

One key difference between the two plans is the contribution limits. In 2023, the annual contribution limit for a 401k plan was $22,500, with an additional $7,500 catch-up contribution allowed for those over age 50. The annual contribution limit for a 457 plan is also $22,500, but eligible employees may be able to make additional catch-up contributions depending on their employer’s plan.

Next Steps

Retirement planning doesn’t have to be one size fits all. Depending on your unique circumstances and goals, several ways to save for retirement can give you the peace of mind you deserve. Our 457-employee savings plan calculator is an excellent tool for estimating how much you need to save. And for those looking for guaranteed income in retirement, an annuity with a GLWB rider may be the right solution. Contact us today for a quote.

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