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I am set to retire October 1, 2016. Should i continue to do the age 50 catch up retirement max into my 457b plan?

Jan 01, 2016 by Jesse in  |  Flag
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3 votes
Peter C. Karp Level 20

Hi Jesse

You should continue to maximize your contributions to your 457(b) plan as long as you are still employed. Since your contributions are pre-tax you will be reducing your taxable income and allow that money to grow in your account tax deferred. These benefits apply to your catch-up contributions as well. Unlike a 401(k) or 403(b) plan, if you leave your job or retire before age 50 ½ and need to withdraw your retirement funds from a 457(b) you will not be subject to the 10% early withdrawal penalty fee.

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Comment   |  Flag   |  Mar 01, 2016 from San Francisco, CA

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If you're not planning to immediately take distributions from any pre-tax retirement accounts and you have the cash flow to add to your savings, then yes you should max out on your allowable contributions as the same benefit of tax-deferral applies to the Catch-Up as to the rest of your contributions

Comment   |  Flag   |  Feb 26, 2016 from Manhattan, NY

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