What is a 457(b)?
The 457(b) deferred compensation Plan is a tax-deferred retirement plan offered by the city of Phoenix, created to allow public employees like you to put aside money from each paycheck toward retirement. A deferred compensation plan can help bridge the gap between what you have in your pension and Social Security, and how much you’ll need in retirement.
Here are some frequently asked questions about deferred compensation plans:
- What sets a 457(b) plan apart from other retirement plans? 457(b) plans may offer benefits other retirement plans can’t, like penalty-free withdrawals once you stop working for your public sector employer.
- What does tax-deferred mean? Basically, you don’t pay income taxes on your 457(b) plan contributions or earnings until you retire and/or begin to take payments from your account. This may lower your taxable income now and in retirement.
- How much can I put into the city’s 457(b) plan? Check out the current contribution limits.
- Can I combine retirement accounts? Our Plan Service Representatives will work with you to combine, or consolidate your eligible retirement accounts into your 457(b)/401(a) account. This may make managing your retirement investments a little easier.
Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½.
Get the help you need
The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist to see what you’ll need to have handy and enroll today!