Friday, April 2, 2010

457 plans redefined

Retirement plans that include employer contributions usually fall into three categories: 401(k), which covers most people who work, 403(b), which covers those who work for non-profis, and 457 plans, which applies to many people who work for government entities. For the most part, these plans work the same way, but we thought we'd take some time here to call your attention to recent changes in 457 plans. They have some particular rules that govern how they work and you need to pay special attention to these rules if you are investing in a 457 plan, particularly if you're getting close to retirement. You can make some catch-up contributions to 457 plans, but there are certain ways it has to be done.

If you need a quick primer, here's a great article we found on Investopedia, which is a terrific resource for people who need help with financial terms.

http://www.investopedia.com/articles/retirement/10/411-on-457-plans.asp

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