457b Calculator

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457(b) Deferred Compensation Calculator

Your 457(b) Projection

Estimated Ending Balance: $0.00
Total Contributions Made: $0.00
Total Compound Growth: $0.00
function calculate457b() { var currentBalance = parseFloat(document.getElementById('currentBalance').value) || 0; var annualContribution = parseFloat(document.getElementById('annualContribution').value) || 0; var years = parseInt(document.getElementById('yearsToRetire').value) || 0; var rate = parseFloat(document.getElementById('expectedReturn').value) || 0; if (years <= 0) { alert("Please enter a valid number of years."); return; } var r = rate / 100; var futureValue = 0; if (r === 0) { futureValue = currentBalance + (annualContribution * years); } else { // FV of current balance var fvCurrent = currentBalance * Math.pow((1 + r), years); // FV of annual contributions (annuity formula) var fvContributions = annualContribution * ((Math.pow((1 + r), years) – 1) / r); futureValue = fvCurrent + fvContributions; } var totalInvested = currentBalance + (annualContribution * years); var totalGrowth = futureValue – totalInvested; document.getElementById('finalBalance').innerText = '$' + futureValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalInvested').innerText = '$' + totalInvested.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalGrowth').innerText = '$' + totalGrowth.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('results-area').style.display = 'block'; }

Understanding Your 457(b) Retirement Plan

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

The Power of Tax-Deferred Growth

In a 457(b) plan, your contributions are taken out of your paycheck "pre-tax." This reduces your taxable income in the present year, effectively lowering your tax bill while you save. The money in the account then grows tax-deferred, meaning you don't pay taxes on dividends or capital gains until you withdraw the funds in retirement.

Key Benefits of a 457(b) Plan

  • No Early Withdrawal Penalty: Unlike 401(k) or 403(b) plans, governmental 457(b) plans usually do not impose a 10% penalty for withdrawals made before age 59½, provided you have separated from service.
  • High Contribution Limits: For 2024, the contribution limit is $23,000. If you are over age 50, you can contribute an additional $7,500.
  • Special Catch-Up Provision: Some plans allow a "3-year catch-up" which lets you contribute up to twice the annual limit in the three years prior to your normal retirement age if you under-contributed in previous years.

Realistic Calculation Example

Imagine a 35-year-old public health worker with a current 457(b) balance of $15,000. They decide to defer $1,000 per month ($12,000 annually) into their plan. If they retire in 25 years and achieve an average 7% annual return, their ending balance would be approximately $841,514.

Pro Tip: Many public employees have access to both a 457(b) and a 403(b). In many cases, you can actually contribute the maximum amount to both plans simultaneously, effectively doubling your tax-advantaged savings capacity.

How to Use This Calculator

To get the most accurate projection, enter your current account total and your planned annual contribution. For the "Expected Annual Return," most long-term investors use a figure between 5% and 8% depending on their risk tolerance and asset allocation (stocks vs. bonds). Remember that market returns fluctuate and are never guaranteed.

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