457 Plan

[snshijuptr]

So my husband is about to re-enter the wild world of public schooling. Last time around we participated in the pension and the 403b plan. I wasn't thinking early retirement so we were just doing the normal thing. I just started looking into the retirement plans again and I was  watching a video on 403b vs 457. It said you could withdraw from 457 plans without penalty at ANY AGE! Am I hearing this correctly? Is the 457 plan like the ultimate early retirement plan? We won't have to do a conversion or a rollover?

[Another Reader]

They can be.  Check on what the options with your plan are when you separate employment.  As long as you can make multiple withdrawals without buying an annuity, they are great for ER.

[jfer_rose]

My current workplace retirement plan is a 457, and yup, I can access that money without penalty any time after leaving my job. I feel very lucky!

[snshijuptr]

Why do all the FIRE bloggers tout the HSA when the 457 is really the ultimate early retirement plan! Especially because employers with 457 plans usually also have a 403b or 401k and possibly even a pension. I'm totally excited now. We are going from access to only IRAs to soon having access to more retirement plans than we can fill.

[Numbers Man]

Why do all the FIRE bloggers tout the HSA when the 457 is really the ultimate early retirement plan! Especially because employers with 457 plans usually also have a 403b or 401k and possibly even a pension. I'm totally excited now. We are going from access to only IRAs to soon having access to more retirement plans than we can fill.

Most people don't have access to a 457B Plan since it's mainly only available to workers in the government and non profits.

[snshijuptr]

Why do all the FIRE bloggers tout the HSA when the 457 is really the ultimate early retirement plan! Especially because employers with 457 plans usually also have a 403b or 401k and possibly even a pension. I'm totally excited now. We are going from access to only IRAs to soon having access to more retirement plans than we can fill.

Most people don't have access to a 457B Plan since it's mainly only available to workers in the government and non profits.

1) That's a whole lot of people if you include federal, state, and local governments including public schools.
2) Not a lot of people have access to an HSA/HDHP. My husbands current job is the only one either of us has held that offered this, and we have had a LOT of jobs in the past few years.

[Another Reader]

The folks that have pensions, 403b's and 457b's have extraordinary opportunities to achieve FIRE.  As long as your 457b is a government plan, it is not subject to creditor claims if your employer fails.  If you can take the 457b investments out without having to roll the account over or take a lump sum distribution, you have unmatched flexibility.  You have a great deal, take maximum advantage of it.

[Spartana]

So my husband is about to re-enter the wild world of public schooling. Last time around we participated in the pension and the 403b plan. I wasn't thinking early retirement so we were just doing the normal thing. I just started looking into the retirement plans again and I was  watching a video on 403b vs 457. It said you could withdraw from 457 plans without penalty at ANY AGE! Am I hearing this correctly? Is the 457 plan like the ultimate early retirement plan? We won't have to do a conversion or a rollover?

Yes you can take it at any age, in any amount, with no penalty at all. The only stipulation is that you have to leave the job you have it thru before you collect. I was a government employee and started to collect mine after I left work when I was 42. Just took about $500/month so I could keep in a low tax bracket (if it was a tax-deferred 457 (most are) then it's taxed like regular income just on the amount you withdraw each year - the remained stays tax-deferred). When you get your 1099 tax form it'll have a little letter or number in the box that corresponds to a code on the back of the 1099 that basicly says you are getting an early withdrawal but it's not subject to penalty. I maxed out my 457 while I was working.

[NickW]

Great thread. I'm glad to hear first hand from people using a 457b. I just learned about this option where I work (higher ed, state school) a few weeks ago and have been starting research into it. It really just sounds too good to be true, and my skepticism has kicked in full gear.

[Another Reader]

Plans vary on how they handle post-separation withdrawals, so I would verify what my plan offers.

[snshijuptr]

Well there goes that plan. Just found out that our new district doesn't offer a 457 option, only the 403b. Dang. Now I have to wait for my company to figure out their retirement options. Oh well, there is always somewhere else to throw our money.

[Rural]

... Made me look. Damn. Mine is lump sum, rollover, or annuity (lifetime or 5-30 year) only and, worse, I have money in there. Oh, and MDO when I get to 70.5, which is a hell of a lot older than I was planning on this money. Now what should I do?