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403(b) vs. 457(b) Plans

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Review the differences between 401(k), 403(b), and 457(b) Plans below. The table below provides the rules within the Internal Revenue Code (IRC). Some of the rules are required to be included in all plans, but some are permissible and may not be allowed in any particular Plan.

 

  401(k)* 403(b) 457(b)
Eligibility  Private employers, some non-profit employers, and churches Public schools, colleges, universities, church-affiliated entities, and 501(c)(3) organizations State and local governments or 501(c) organizations
Pre-Tax Contributions Yes
Roth 
After-tax Contributions		 Yes 

Only permitted in governmental 457(b) plans
Age 50+ Catch-Up Contributions Yes

Yes

Only permitted in governmental 457(b) plans
Additional Catch-Up

 Age 60-63 additional catch-up (effective 2025 per SECURE 2.0)

15-year rule**

Age 60-63 additional catch-up (effective 2025 per SECURE 2.0)

Three-year rule*** 

Age 60-63 additional catch-up (effective 2025 per SECURE 2.0) Only permitted in government 457(b) plans. 
Limitations on Deferrals

Lesser of:

IRC dollar limit: ($23,000 for 2024, $23,500 for 2025)

100% of compensation

 
Limitations on Total Contributions

Lesser of:

IRC dollar limit: ($69,000 for 2024, $70,000 for 2025)

100% of compensation

Limit coordinated across 401(k) and 403(b) plans in which the employee participates. 

Lesser of:

IRC dollar limit: ($23,000 for 2024, $23,500 for 2025)

100% of compensation

Limit not coordinated with 401(k) and 403(b) limit
Distributions While Employed

Only on account of:

  • Hardship
  • Age 59 ½ or older
  • Qualified federally declared disasters
  • Birth or adoption
  • Domestic abuse survivor
  • Small emergency

Only on account of:

  • Unforeseeable emergency
  • Age 59 ½ or older

Governmental 457(b) plans also allow on the account of:

  • Qualified federally declared disasters
  • Birth or adoption
  • Domestic abuse survivor
  • Small emergency
Distributions Without Tax Penalty****
  • Retirement after age 55
  • Death or disability
  • After age 59 ½ 
  • Lifetime annuity or installments
  • Rollover
  • Federally declared disaster
  • Birth or adoption
  • Domestic abuse survivor
  • Small emergency
  • Terminal illness
 Not subject to 10% penalty with exception of amounts rolled over from plans that are subject to penalty taxes
Distributions With Tax Penalty****
  • Retirement or separation before age 55
  • Hardship (unless another IRC exception applies)
 Amounts rolled over from other retirement plans may be subject to the penalty, if distributed prior to age 59 ½ (unless another IRC exception applies)
Required Minimum Distributions  April 1st, following the later of the year in which you become age 72, or the year in which you retire. SECURE 2.0 has updated this age to 73 effective January 1, 2023. 
Rollovers Incoming and outgoing rollovers
 Transfers Incoming and outgoing transfers
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