457 Plan Calculator

457(b) Retirement Plan Calculator

Estimated Balance at Retirement

$0

Total Contributions $0

Total Interest Earned $0

function calculate457Result() { var currentAge = parseFloat(document.getElementById('currentAge').value); var retirementAge = parseFloat(document.getElementById('retirementAge').value); var currentBalance = parseFloat(document.getElementById('currentBalance').value); var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value); var annualReturn = parseFloat(document.getElementById('annualReturn').value) / 100; var annualIncrease = parseFloat(document.getElementById('annualIncrease').value) / 100; if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentBalance) || isNaN(monthlyContribution)) { alert("Please enter valid numbers in all fields."); return; } if (retirementAge <= currentAge) { alert("Retirement age must be greater than current age."); return; } var years = retirementAge – currentAge; var balance = currentBalance; var totalInvested = currentBalance; var monthlyRate = annualReturn / 12; for (var year = 1; year <= years; year++) { for (var month = 1; month <= 12; month++) { balance = (balance + monthlyContribution) * (1 + monthlyRate); totalInvested += monthlyContribution; } // Apply annual increase to monthly contribution amount monthlyContribution = monthlyContribution * (1 + annualIncrease); } var totalInterest = balance – totalInvested; document.getElementById('totalValue').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(balance.toFixed(0)); document.getElementById('totalContrib').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(totalInvested.toFixed(0)); document.getElementById('totalInterest').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(totalInterest.toFixed(0)); document.getElementById('resultArea').style.display = 'block'; }

How a 457(b) Plan Works

A 457(b) plan is a tax-advantaged deferred compensation retirement plan available for state and local government employees, as well as some non-profit executives. Unlike a 401(k), the 457(b) plan has unique features that make it highly attractive for public sector workers, such as firefighters, police officers, and teachers.

The Power of Early Withdrawal

One of the most significant benefits of a governmental 457(b) plan is the lack of a 10% early withdrawal penalty. If you separate from service with your employer (quit, retire, or are fired), you can access your funds immediately without the typical 10% IRS penalty usually associated with withdrawals before age 59½. You will still owe standard income tax on the distributions, but the flexibility is unparalleled compared to 401(k) or 403(b) accounts.

Contribution Limits for 2024

• Standard Deferral: Up to $23,000 per year.
• Age 50 Catch-up: If you are 50 or older, you can contribute an additional $7,500, for a total of $30,500.
• Pre-Retirement Catch-up: In some cases, if you are within 3 years of your "normal retirement age," you may be able to contribute up to double the standard limit (up to $46,000) depending on unused prior contributions.

Case Study Example

Imagine a 35-year-old public health official with $20,000 already in their 457(b) plan. If they contribute $1,000 per month and expect a 7% annual return, after 25 years (at age 60), their account would grow to approximately $894,000. If they increase their contributions by just 3% each year to keep up with raises, that final balance could exceed $1.2 million.

Why Use This Calculator?

This calculator helps you visualize the compound growth of your deferred compensation. By adjusting the "Annual Contribution Increase," you can see how even small, incremental bumps in your savings rate can lead to massive differences in your terminal wealth. It accounts for monthly compounding interest, which is how most institutional retirement accounts credit earnings.

Disclaimer: This calculator is for educational purposes only. Results are estimates based on input variables and do not guarantee future performance. Consult with a financial advisor regarding your specific tax situation and investment choices.