The maximum annual contribution limit for 457(b) plans is $23,000 for 2024 (or 100% of gross annual compensation, if less).
| Year | Annual 457(b) Contribution Limits |
| 2024 | $23,000 |
| 2023 | $22,500 |
Cost of living adjustments may allow for additional increases to these limits in increments of $500 per year.
Catch-up Contributions
A special catch-up limit allows participants who are age 50 and over to contribute an additional amount each year.
| Year | Annual 457(b) Contribution Limits | Additional Catch Up Limit | Total 457(b) Contribution Limit |
| 2024 | $23,000 | $7,500 | $30,500 |
| 2023 | $22,500 | $7,500 | $30,000 |
Cost of living adjustments may allow for additional increases to these limits in increments of $500 per year.
If youare within three years of attaining the normal retirement age of 65, another catch-up limit allows you to contribute up to twice the "annual contribution limit." The maximum amount allowed is actually the lesser of:
- twice the annual limit, or
- the annual limit, plus the total amount of underutilized contributions from prior years.
Participants who use this catch-up limit cannot also use the "age 50" catch-up limit in the same year.
EXAMPLE
Let's assume it is 2024, Jane is 62 years old, and she is within three years of her normal retirement age of 65. Let's also assume that she contributed $6,000 in 2021, $7,000 in 2022, and $8,000 in 2023, for a total of $21,000. However, she could have contributed $62,500 in those three years ($19,500 + $20,500 + $22,500) for an extra $41,500. Because Jane is within three years of her normal retirement age, she can contribute the lesser of:
- $46,000 (twice the annual 2024 limit of $23,000); or
- $64,500 (the 2024 limit of $23,000, plus the $41,500 "left over" amount from the three previous years).
In this example, Jane would be allowed to contribute $46,000 in 2024.
FAQs
A 457(b) plan's annual contributions and other additions (excluding earnings) to a participant's account cannot exceed the lesser of: 100% of the participant's includible compensation, or. the elective deferral limit ($23,000 in 2024; $22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and in 2021).
What are the contribution limits for a 457 B deferred compensation program? ›
How do 457(b) plans work? Employers or employees through salary reductions contribute up to the IRC 402(g) limit- $22,500 in 2023 ($20,500 in 2022; $19,500 in 2021 and in 2020; $19,000 in 2019) on behalf of participants under the plan.
How much can I contribute to my 457 if I am over 50 in 2024? ›
Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024.
What are the annual contributions limits of a 403 B and 457? ›
You might be surprised by how much the IRS will let you contribute to the UC 403(b) and 457(b) this year. You can save up to $23,000 in any combination of pretax or Roth contributions to the 403(b) Plan, plus another $23,000 in pretax or Roth contributions to the 457(b) Plan.
What happens if you contribute too much to 457b? ›
What happens if I contribute too much? The excess contribution is taxable income in the year it was contributed and must be withdrawn from the Plan.
What are 457 B contributions? ›
Governmental 457(b) plans are sponsored by a government entity. Like with 401(k)s, your contributions are held in a trust and can't be claimed by your employer's creditors. Money saved in a governmental 457(b) can be rolled into other retirement accounts, such as IRAs and 401(k)s.
What is the maximum 457 contribution limit for 2024? ›
The maximum amount you can contribute to a 457 retirement plan in 2024 is $23,000, including any employer contributions. That's an increase of $500 over 2023. For example, if your employer contributes $5,000, you're allowed to contribute $18,000 to meet the annual limit.
Can I max out both 403b and 457 B? ›
A question I get often is, “Can I contribute to both a 403(b) and 457 plan?” The answer is yes. If your employer offers both, you can contribute to (and max out) both. Let's take a closer look at the retirement picture in higher education and how you can maximize your retirement plan contributions.
Can you contribute to both 401k and 457 B? ›
It's possible that you may have access to a 457(b) and a 401(k). The IRS says it's okay to contribute to both at the same time. Since retirement plans typically have contribution limits, contributing to a different plan can double your tax deferral.
What is the difference between a 457 and a 457b? ›
The 457(b): This is the most common 457 plan and is offered to state and local government employees and nonprofits. It is a retirement savings plan that offers tax advantages to participants. The 457(f): This plan is offered only to highly compensated executives in tax-exempt organizations.
Each plan features certain advantages. For example, there isn't an early-withdrawal penalty with a 457 plan once you leave the employer sponsoring the plan; and a 457 also offers more generous catch-up contributions than a 403(b) plan in the three years before retirement.
How much should I put into deferred compensation? ›
One easy way to increase your retirement savings is to contribute a percentage of your income to your Deferred Compensation Plan (DCP) account. Consider saving between 7% and 10% of your salary. The DCP makes it easy for you to save a percentage of your income through the percent-of-pay feature.
How do I avoid tax on my 457b withdrawal? ›
Generally, withdrawals must be repaid within three years in order to avoid the money being taxed as income. Finally, if your plan allows it, you can access some of your money via a loan. The maximum a participant can borrow is 50 percent of the vested account balance or $50,000, whichever is less.
Does a 457b lower your taxable income? ›
Your 457(b) Savings Plan contributions will be automatically deducted from your gross pay before any federal — and in most cases, state and local — income taxes are deducted. This reduces your taxable income, which means you pay less income tax each year.
Are 457b plans worth it? ›
A big advantage of a 457(b) over a 401(k), 403(b), or IRA is that there is no penalty for withdrawing the money before a certain age. Once you have left the employer, you can pull the money out penalty-free whether you are 40 or 70. Thus, 457(b) money is often some of the first money an early retiree spends.
Do deferred compensation plans have contribution limits? ›
401(k) Plans
Thus, a high-earning employee making $800,000 in 2023 would only be able to contribute 2.81% ($22,500 / $800,000) of their salary to a 401(k). The same salary in 2024 would be 2.88% ($23,000 / $800,000). Deferred compensation plans have no limits imposed by the Internal Revenue Service.
What is the maximum contribution to 401k and 457? ›
2024 retirement plan contribution limits
For individuals under age 50, the maximum contribution to 401(k), 403(b), and 457(b) plans increased to $23,000. For individuals age 50 and older, the additional catch-up contribution to 401(k), 403(b) and governmental 457(b) plans remains $7,500 for a total of $30,500.
