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A 457(b) plan is a retirement savings option for government and not-for-profit employees, similar to a 401(k). It provides significant tax benefits for retirement investment. Unlike a Roth IRA, there are no income limits for contributing to a 457(b); any eligible employee can participate if offered by their employer. As of 2021, the annual contribution limit is $19,500, with individuals aged 50 and older able to make catch-up contributions up to $26,000. The IRS code offers a framework for these plans, allowing employees to save effectively for retirement while taking advantage of tax benefits.
