Today we delve into the topic of 457 plans as a component of employee benefits, an area we have not explored previously. I want to take the opportunity to provide a comprehensive understanding of these plans, highlighting their distinctions from the widely known 401(k). My aim is to equip you with the necessary knowledge to make informed assessments of the suitability of a 457 plan as part of your financial strategy.
Listen in as I clarify the fundamental characteristics of a 457 plan, emphasizing its unique attributes and dispelling any misconceptions surrounding its divergence from the 401(k). I caution you to ascertain the classification of your 457 plan as either governmental or tax-exempt, as this distinction affects distribution options. You will learn the potential limitations, particularly within tax-exempt 457 plans, and the target audience that can derive the greatest benefits from leveraging a 457 plan.
What You’ll Learn In Today’s Episode:
- Why you should not think about 457 plans the same way you think about 401(k)s.
- What a 457 plan is and how it is different from a 401(k).
- The main benefit of a 457 plan.
- What you need to know about your 457.
- The limited distribution options in tax-exempt 457s.
- Who should definitely be using a 457 plan.
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