1. 61667 POINTS
    Steve SavantPRO
    Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
    A 457 plan is a deferred compensation, non-qualified tax deferred-compensation retirement plan. 457(b) plans are used by state and local governments and 501(c) organizations. 457 plans has similarities to defined contribution plans like 401(k)s, but no 10% penalty for withdrawals before age 59½. 457 plans are predicted on deferring income.
     
    Answered on September 14, 2013
  2. 37376 POINTS
    David G. Pipes, CLU®, RICP®PRO
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The Internal Revenue Code allows certain state and local governments and non-governmental organizations a tax exemption for plans that defer compensation.  This exemption is under section 457.  Individuals covered by these plans can chose to defer income to specified limits and thus defer income tax on their contribution and subsequent earnings until the time of retirement.
    Answered on July 9, 2014
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