403(b) vs. 4578(b)

This chart is for summary purposes only. For more information, contact the Internal Revenue Service at 1-800-829-4477 or www.irs.gov. For advice or further information regarding retirement planning, contact a financial advisor or tax expert. Make sure you carefully research each vendor and investment options before enrolling in a voluntary retirement plan

403(b)

457(b)

Pre-Tax Contribution?

Yes

Yes

Is there a limit to how much I can contribute per year?

$20,500 (2022)

$20,500 (2022)

What if I don’t contribute $20,500 per year?

Various “catch-up” options may allow you to contribute more than $20,500*.  If you are over age 50 you may contribute an additional $6,500*.  There is also a catch-up option available to employees with at least 15 years of service with their current employer.  The 15-years of service catch-up could enable you to contribute up to $3,000* additional per year up to a maximum of 5 years.

Various “catch-up” options may allow you to contribute more than $20,500*.  If you are over age 50 you may contribute an additional $6,500*.  Or there is a catch-up option available to some employees entering their final 3 years of employment prior to attaining normal retirement age which may allow for up to $20,500* additional to be contributed. However, there is no 15 years of service catch up option

I will be retiring soon, is there a limit to the catch up amount?

No catch-up for entering your final 3 years of services of service prior to retirement.

457(b) plans may allow you to exceed the $20,500* annual contribution limit if you are entering your final 3 years of employment prior to retirement.

Can I Withdraw Funds?

The following are events that will allow you to withdraw funds from your account and either receive the money directly or rollover the money to a different retirement plan:

· Termination of employment  

  from current employer

· Retirement

· Attainment of age 59 ½

· Disability

· Death

· Financial hardship

However, certain tax penalties may apply when money is withdrawn prior to age 59 ½.  Consult with your advisor for additional details.

Direct withdrawals may generally be made in the form of a lump sum distribution or in an annuity payment.

Loans may also be taken from your 403(b) plan.  Consult with your advisor for additional details.

The following are events that will allow you to withdraw funds from your account and either receive the money directly or rollover the money to a different retirement plan:

· Termination of employment

  from current employer

· Disability

· Death

· Unforeseeable emergency

Direct withdrawals may generally be made in the form of a lump sum distribution or in an annuity payment.

Loans may also be taken from your 457(b) plan.  Consult with your advisor for additional details.

No 10% penalty for early withdrawal

What vendors can I use?

There are many vendors who offer 403(b) plans within our district. Refer to our retirement tab for a list or contact Schools First, our 3^rd party administrator

The FBC Plan may be the only 457(b) option within our district