Key takeaways

• 403(b)s and 457(b)s are tax-advantaged workplace retirement plans that allow eligible workers to contribute and invest pre-tax money
• A 403(b) is typically available to employees of public schools, colleges, universities, or nonprofit organizations, while a 457(b) is generally offered by state and local government agencies.
• A governmental 457(b) can offer greater flexibility after separation, while a 403(b) has a higher combined employee-plus-employer contribution limit.

403(b)s and 457(b)s are tax-advantaged workplace retirement plans offered to certain public sector and nonprofit employees. Employees can typically contribute pre or post-tax money through paycheck deduction and invest the money for retirement, which allows their savings the opportunity to grow over time. Both a 403(b) and a 457(b) provide opportunities for potential tax savings and wealth building, but with different contribution limits and withdrawal rules.

Americans in their 60s have an average of $1,228,196 in retirement savings, and contributing to an employer-sponsored plan is one way to help grow your retirement fund. Before choosing and enrolling in a workplace retirement plan, it’s important to understand how each account works, the types of 457(b)s offered, and whether it’s possible to contribute to both a 403(b) and a 457(b).

403(b) vs. 457(b) at a glance

403(b) and 457(b) plans share many similarities, including how contributions are made. However, they have different rules and limits. Below is a brief overview highlighting the features of each account.

What is a 403(b) plan?

403(b)s are tax-advantaged workplace retirement plans commonly offered to employees of public schools, certain non-profits with 501(c)(3) status, churches, and related organizations. Typically, an employer withholds contributions from each paycheck and deposits this money directly into the employee’s 403(b) account. Employers may also contribute, often through matching contributions.

Some plans give employees the option for designated Roth contributions, which are made with after-tax dollars in exchange for tax-free qualified withdrawals in retirement. Unlike traditional pre-tax plans, Roth accounts do not require minimum distributions (RMDs) once employees reach the age of 73.

Benefits of a 403(b)

When compared to 457(b)s, 403(b)s stand out in the following ways:

• 403(b)s have higher combined contribution limits as employer-contributions do not count toward employees’ individual limits
• Employees who have worked for their employer for 15 years or more may be eligible for an additional catch-up contribution, when allowed by their plan

Read more: 401(k) vs. 403(b)

What is a 457(b) plan?

A 457(b) is a deferred compensation plan offered by state and local governments or certain tax-exempt employers. It functions similarly to a 403(b) plan including payroll contributions and required minimum distribution (RMD) rules apply. Depending on the plan, they can also offer the same option to make pre-tax or Roth contributions.¹

There are two types of 457(b)s: governmental and non-governmental. Governmental 457(b)s are typically offered by state and local government agencies, with assets held in trust for employees. Non-governmental 457(b)s are generally offered to managers or highly compensated employees of certain tax-exempt entities. Non-governmental 457(b) assets are not held in a trust for the employee. Instead, this money remains the property of the employer until the employee leaves their job or receives an exception based on financial hardship. ^2,3

Benefits of a 457(b)

457(b)s offer several benefits when compared to 403(b)s:

• Some 457(b)s offer an additional catch-up for employees within 3 years of the normal retirement age (as specified in the plan)⁴
• Distributions from a governmental 457(b) generally can be taken once an employee leaves their job (regardless of age) or reaches 59½ years of age⁵

In-depth look at the differences between 403(b) and 457(b) plans

403(b)s and 457(b)s are different in who can participate and how contribution limits are shared, what catch-up contributions are available, and when funds can be accessed.

Who can participate

Employers offer 403(b) and 457(b) plans as a benefit to help employees save for retirement. 403(b)s are generally offered by public schools, colleges, universities, and certain nonprofits. Governmental 457(b)s are typically offered by state and local government agencies, while non-governmental plans are available on a case-by-case basis to employees of non-governmental tax-exempt entities such as charities and social welfare organizations. ⁶

Contribution limits in 2026

Employees can contribute up to $24,500 ($32,500 if age 50 or older) to their 403(b)s or governmental 457(b)s through salary deferrals in 2026. Some of these plans also allow employees ages 60 to 63 to make a catch-up contribution of $11,250, bringing their annual limit to $35,750 in 2026. ⁷ The deferral limit for 403(b)s may also be subject to cost-of-living adjustments. ⁸

An employee’s salary deferral limit is shared across 403(b)s and other non-457(b) retirement accounts, meaning contributions across all accounts must stay under this amount. This differs from 457(b)s, which have separate annual limits for each account. ⁹ For those already contributing to a workplace retirement plan, governmental 457(b)s can offer a way to put more money into tax-advantaged accounts.

Employer contributions

Employer contributions to a 457(b) are included within an employee’s annual deferral limit of $24,500 (or more with catch-ups). ¹⁰ However, with 403(b)s, employer contributions are instead limited to a greater employee-plus-employer contribution limit. This limit in 2026 is the lesser of: ¹¹

• $72,000; or
• 100% of an employee’s compensation for the most recent year.

Employer contributions to 403(b)s and 457(b)s may follow a vesting schedule, but employees always retain ownership of their own contributions.

Special catch-up contributions

Special catch-up contributions are offered by certain 403(b) and 457(b) plans. Some 403(b) plans allow employees with 15 years of service to contribute up to an additional $3,000, though this is subject to a $15,000 lifetime maximum. ¹²

Depending on the 457(b), there may also be an additional catch-up for employees within 3 years of normal retirement age. This catch-up typically permits the lesser of:

• Twice the regular annual limit, which would be $49,000 in 2026; or
• The regular annual limit plus unused contribution capacity from eligible prior years.

Employees generally cannot use the 457(b) final 3-year catch-up and an age-based catch-up in the same year. ¹³

Withdrawals and early retirement access

Withdrawals from a pre-tax 403(b) or pre-tax 457(b) are taxed as ordinary income, though qualified Roth contributions can be withdrawn tax-free. ¹⁴ For both accounts, required minimum distributions (RMDs) must be taken starting at age 73.

A 403(b) has more restrictive withdrawal rules, and money withdrawn before age 59½ is generally subject to a 10% penalty. Conversely, individuals can generally withdraw funds from their governmental 457(b) at any point after they change jobs or retire. There is, however, a caveat: 457(b)s funded by rollovers from another type of plan do not have the same withdrawal flexibility. Instead, individuals must wait until age 59½ to begin withdrawing funds or face the 10% penalty. ¹⁵

Non-governmental 457(b)s may also have additional withdrawal rules, though this depends on the plan. ¹⁶

Can you contribute to both a 403(b) and a 457(b)?

If both plans are available through your employer, you may contribute to both because they have separate contribution limits. This most commonly occurs in public education, where employers may offer both plans. Because they don’t share a contribution limit, using both may nearly double the amount you can put into tax-advantaged accounts. For example, in 2026 you could contribute up to $24,500 to your 403(b) and your 457(b), totaling $49,000 before eligible catch-ups. Keep in mind that employer contributions count toward the 457(b) contribution limit.

To find out whether you can contribute to both a 403(b) and a 457(b), start by contacting your plan administrator.

FAQs

Can you roll over a 403(b) or 457(b) to an IRA?

An eligible distribution from a 403(b) or governmental 457(b) plan may be rolled over to an IRA. Required minimum distributions and 403(b) hardship distributions typically cannot be rolled over.

A non-governmental 457(b) is different: Distributions from these plans generally cannot be rolled over to an IRA or another eligible retirement plan. ¹⁷

Can I roll over my 403(b) or 457(b) while still employed?

Rollovers while still employed are only possible if your plan permits an in-service distribution. The plan must first allow the distribution, and the distribution must also be eligible for rollover treatment. ¹⁸

How do I find an old 403(b) account?

To find a 403(b) account from a previous employer, start by reviewing any statements and tax forms related to the account. If you’re unable to find the information necessary to access the account, try contacting your former employer or plan administrator for additional assistance.