Navigating Required Minimum Distribution 457 Plan Withdrawals and Tax Implications

You'll need to take a required minimum distribution (RMD) from your 457 plan by April 1st of the year after you turn 72, or by December 31st of the same year.

The RMD is based on your account balance as of the previous year's December 31st, and the amount is calculated using a formula that takes into account your age and account balance.

Taxes will be withheld from your RMD, but you can also choose to have taxes withheld from future distributions if you prefer.

You'll need to report your RMD on your tax return, and you may be able to deduct the amount you contributed to your 457 plan if you itemize deductions.

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Contributions to a 457(b) plan are made on a pre-tax basis, reducing taxable income and growing tax-deferred until withdrawal.

Pre-tax contributions to a 457(b) plan reduce the employee’s taxable income for the year.

Employees may be able to make after-tax Roth contributions, which allow for potentially tax-free withdrawals.

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457(b) plans also have the advantage of catch-up options, allowing employees over age 50 to contribute on top of the limit for the year.

Employees over age 50 can contribute on top of the limit for the year.

For employees, the key benefit of a 457(b) plan is that the savings are tax-deferred, reducing taxable income and growing tax-deferred until withdrawal.

Participants aged 60, 61, 62, and 63 can contribute an additional amount on top of the normal contribution limit.

Offering a 457(b) plan can be used as part of a wider recruitment and retention strategy for employers.

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The 457(b) RMD rule requires you to withdraw a certain amount from your retirement plan, and it's up to you to make sure you're doing it correctly.

You'll receive a notification from your retirement plan administrator stating what your RMDs are, so be sure to keep an eye out for that.

The penalty for missing an RMD is steep, at 25% of the value of the withdrawal, although this was reduced from 50% with the SECURE Act 2.0.

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You can reduce this penalty to 10% if you correct it by the date it's imposed.

Any amount distributed during a year when an RMD is due is considered part of the RMD, so be careful not to take too much.

If you have multiple IRA accounts, you can take the individual RMD amount from each one, total the amounts, and take the money from one IRA.

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Contributions to a 457(b) plan are made on a pre-tax basis, reducing taxable income and growing tax-deferred until withdrawal.

Pre-tax contributions to a 457(b) plan can be made up to a certain limit, which is established by the IRS each year. In 2025, eligible employees can contribute up to $23,500 to the 457(b) plan.

Employees can also make after-tax Roth contributions, which allow for potentially tax-free withdrawals. These contributions and all associated earnings are not subject to tax until withdrawal.

Employees over age 50 can contribute on top of the limit for the year, known as catch-up contributions. This allows them to increase their contributions beyond the normal maximum.

Participants aged 60, 61, 62, and 63 can contribute an additional amount on top of the normal contribution limit, using the special Pre-Retirement Catch-Up Provision.

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You can invest your 457 plan contributions in a variety of options offered by providers like TIAA and Fidelity.

Investment choices include a range of funds offered by either provider under the plan.

For withdrawals, you have a 60-day window to submit a distribution election to your provider after termination of employment.

You can elect one of several distribution options, including a lump sum, monthly installments, an annuity, or direct transfer to another non-governmental 457 plan.

Here are the distribution options available:

Required minimum distribution (RMD) rules apply to 457 retirement accounts, which means you'll need to withdraw a certain amount annually in retirement, starting at age 73.

When choosing how to invest your 457 Plan, you have two main options: TIAA and Fidelity.

Both TIAA and Fidelity offer a range of investment options, allowing you to direct your contributions to the funds that best suit your needs.

You can choose from a variety of fund choices offered by either provider under the plan.

Here are the investment options available from each provider:

Keep in mind that the specific details of each provider's investment options will be outlined in your plan documents, so be sure to review those carefully before making any investment decisions.

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Withdrawals from a 457 plan can be complex, but understanding your options can make a big difference.

You have a 60-day window after termination of employment to submit a distribution election to your provider, or you'll receive a lump sum distribution by default.

A lump sum distribution is one option, but you may also choose to receive monthly installments over a fixed period. This option must meet the required minimum distribution rules, which come into play when you reach 73 and are no longer working for that employer.

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If you're a TIAA participant, you may also opt for an annuity, which is a type of regular payment based on your account balance.

Your distribution options are irrevocable, so choose wisely and make sure you understand the implications before making a decision.

Here are some of your distribution options:

Tax implications of a 457 plan withdrawal can be complex, but one thing's for sure: withdrawals are generally taxable.

The 10% penalty tax typically doesn't apply to distributions prior to age 59½, unless they're from assets transferred to the 457(b) plan from other retirement accounts.

Required minimum distribution (RMD) rules do apply to 457(b) retirement accounts, and they begin when someone reaches 73 and is no longer working for that employer.

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Withdrawals from a 457 plan are generally taxable. However, there's a silver lining - unlike other retirement accounts, you won't face a 10% penalty tax for distributions prior to age 59½, unless the distribution includes assets transferred from other types of retirement accounts.

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You'll still need to pay taxes on your withdrawals, but the good news is that you can withdraw your contributions and earnings tax-free if you've made Roth contributions and meet certain criteria.

Required minimum distributions (RMDs) apply to 457 retirement accounts, which means you'll need to take a minimum amount out annually in retirement. This starts when you reach 73** and are no longer working for that employer.

You have a 457(b) retirement plan, and now you're considering rolling it over to a new plan. 457(b) plan rollover options depend on the type of 457(b) retirement plan you have.

If you have a 457(b) plan, you can roll it over to a traditional IRA or another 457(b) plan. You can also roll it over to a Roth IRA, but be aware that this will convert your pre-tax contributions to after-tax contributions.

You can roll over your 457(b) plan to a new employer's 457(b) plan, which can be a great option if you change jobs. This way, you can consolidate your retirement accounts and make it easier to manage your finances.

Rollover options for 457(b) plans can be complex, so it's a good idea to consult with a financial advisor to determine the best course of action for your specific situation.

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If you have a 457(b) retirement plan, you have several options and alternatives to consider. A 457(b) plan rollover is one option, but it depends on the type of plan you have.

You can rollover a 457(b) plan, but the options depend on the type of 457(b) plan you have. Some plans may allow you to roll over to an IRA, while others may not.

A 457(b) plan rollover can be done to an IRA, but the rules are different for different types of plans. You should learn about the rollover options for your specific plan.

You can also consider other alternatives, such as leaving the money in your 457(b) plan or taking a distribution.

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