The most you can contribute in a year is:
- The lesser of 100% of your salary and $23,000 for 2024 ($23,500 for 2025)
- Plus a catch-up contribution of up to $7,500 if you’re in a governmental plan and you’re aged 50 or over in the year
- If your employer offers both 457(b) and 403(b), you can contribute $23,000 to each plan, for a total of $46,000.
- Some 457(b) plans allow a special catch-up for those within 3 years of the plan’s normal retirement age, if they have eligible prior years with no contributions. They can contribute up to the lesser of:
- Double the annual limit (if not already using the 50+ catch-up described previously) and
- The annual 457(b) limit, plus any amount of unused contribution limit from prior years
Employers usually don’t match 457(b) contributions.
A governmental 457(b) plan can be altered to allow designated Roth contributions and in-plan rollovers to designated Roth accounts. The purpose is to make contributions during working years using after-tax funds, that are tax-free on distribution in retirement. That can be useful if your income tax rate will be higher in retirement than it was when working.
Participants can be penalized for excess contributions if they aren't removed by April 15 of the following tax year.
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