Unbelievably, we are already up to episode #50 of the Finance Flash Go! podcast! (Actually, we are well beyond episode #50, but are just catching up to it on my recaps here.) I want to thank you all so much for listening and subscribing and giving us reviews. You are what makes this podcast so much fun and so successful!
Anyway, let’s get into the actual content that you came here for!
In this recap of episode #50 of the Finance Flash Go! podcast, we are going to talk about 457 accounts!
A 457 investment account is another tax advantaged retirement account. It comes in two flavors: governmental 457 and non-governmental 457.
Governmental 457 accounts are more common and cater to local and state public workers rather than for-profit employers like 401(k)s.
Non-governmental 457s are available to certain tax-exempt non-governmental institutions. They are similar but, in general, governmental 457s are a bit better.
Like 401(k)s, 457s allow pre-tax contributions that grow within the account and are taxed upon withdrawal. The 2020 contribution limit is $19,500. While employer contributions are possible, the total limit stays $19,500. This means that is your employer will contribute $10,000, you can only contribute $9,500.
The disadvantage again is that you can only withdraw from this account without a 10% penalty at age 70½ or for other qualified emergencies, etc.
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