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Contributing to 457 Plans

In this video, the advisors discuss 457 plans, also known as deferred compensation plans. They explain that a 457 plan is a type of non-qualified retirement plan that operates similarly to a 401(k) or 403(b). The key advantage of a 457 plan is that contributions to it do not count toward the annual 402(g) limit, allowing individuals to contribute to both a 457 plan and another retirement account like a 401(k) simultaneously. They highlight that 457 plans offer the flexibility to contribute either on a traditional pre-tax basis or as Roth contributions, with growth being tax-deferred and Roth distributions being tax-free. However, the advisors also point out several disadvantages of 457 plans. These include limited investment options with potentially high fees and the fact that the money in a 457 plan is technically considered deferred compensation and may not be as secure as other retirement accounts in the event of an employer's financial troubles. They recommend caution when considering 457 plans and suggest that individuals evaluate the financial stability of their employer and the specific terms of the plan before making substantial contributions. Additionally, they emphasize that governmental 457 plans generally have more security compared to non-governmental ones. Overall, they advise viewers to carefully assess their specific 457 plan and consider their long-term financial goals and risk tolerance before making investment decisions. Connect with EWA ⁠ https://ewa-llc.com/⁠ Follow Us on Social Media   / ewa.llc   ⁠  / ⁠   ⁠   / ⁠   View EWA Disclosures and Firm ADV: https://adviserinfo.sec.gov/firm/summ...