Maximizing Your 457(b) Plan: A Comprehensive Guide
October 24, 2023

When it comes to preparing for retirement, it's essential to make the most of the retirement savings vehicles available to you. One such option is the 457(b) plan, a valuable tool for state and local government employees, as well as certain non-profit workers. In this comprehensive guide, we'll walk you through the steps to maximize the benefits of your 457(b) plan, helping you secure a financially comfortable retirement.

A 457(b) plan offers unique benefits for retirement savers. Here's how you can make the most of it:

1. Start Early:

One of the most effective ways to maximize your 457(b) plan is to start early. Time is your best friend when it comes to retirement savings, and the sooner you begin contributing, the more your investments can grow over time.

2. Contribute Aggressively:

Take full advantage of the contribution limits set by the IRS. For 2023, the limit is $22,500, but if you're over 50, you can make additional "catch-up" contributions of up to $7,500. Maximizing your contributions can significantly boost your retirement nest egg.

3. Understand Investment Options:

457(b) plans typically offer a range of investment options. Diversify your investments and consider your risk tolerance. A well-balanced portfolio can help protect and grow your savings. 

4. Take Advantage of Employer Match:

Some employers offer a matching contribution to your 457(b) plan. This is essentially free money. Contribute enough to receive the full employer match to make the most of your plan.

5. Make Catch-Up Contributions:

As you approach retirement age, consider taking advantage of catch-up contributions. If you're age 50 or older, these additional contributions can give your savings a significant boost in the final years before retirement.

6. Review and Adjust Regularly: 

Your financial situation and goals may change over time. Periodically review and adjust your 457(b) plan contributions and investment choices to ensure they align with your retirement objectives. 

7. Avoid Early Withdrawals:

While 457(b) plans offer flexibility, it's best to avoid early withdrawals if possible. Early withdrawals may result in penalties and taxes. Keep your plan intact to grow your savings over time. 

Maximizing your 457(b) plan is a smart and proactive approach to securing your financial future in retirement. Starting early, contributing aggressively, understanding your investment options, and taking advantage of employer benefits are all key steps in this process.

At Retirebetter, we specialize in helping individuals like you make the most of their retirement planning. Our team of experts can guide you in optimizing your 457(b) plan, ensuring you're on the path to a comfortable and secure retirement. Contact us today to explore our services and take your retirement planning to the next level. Your future self will thank you for it.