Personal Finance & Estate › Retirement accounts & pensions › 401(k) plan
403(b) & 457(b) plans (nonprofit & government)
403(b) 1958; 457(b) 1978· Account or plan
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
Workplace savings plans for nonprofit and public-school employees (403(b)) and state and local government workers (457(b)).
See it on the Personal Finance & Estate map →How it works
Both work like a 401(k), with the same $24,500 deferral limit in 2026. Two quirks matter. Someone offered both a 403(b) and a 457(b) can fill each, deferring $49,000. And governmental 457(b) withdrawals after leaving the job escape the 10% early-withdrawal penalty at any age. Non-governmental 457(b) money legally belongs to the employer until paid, so it is exposed to the employer's creditors. Main trap: school 403(b)s sold as high-fee annuities.
Why it matters for you
Millions of teachers, nurses and public employees save here; the 457(b) penalty exception helps early retirees bridge to 59½.
Rules, limits and sources (2026)
IRC Sec. 403(b) (1958) and Sec. 457(b) (1978); IRS limit notices; press investigations since 2016 into high-fee annuities sold in school 403(b) plans.
Watch out for
Public-school 403(b)s sit outside ERISA's fee rules; whether Congress will tighten them, or open cheaper pooled trusts to them, is unresolved.
Connections (2)
▸403(b) & 457(b) plans (nonprofit & government) are nonprofit and government cousins of 401(k) planLaw or rule (2026)
How they connect
403(b) and 457(b) plans copy the 401(k) model for employers that don't use one: public schools, hospitals and charities (403(b)) and state and local governments (457(b)). They have the same deferral limit, Roth options and rollovers, but differ on penalties, catch-ups and ERISA coverage.
When it applies
403(b) dates from 1958 and 457(b) from 1978; laws in 2001, 2006 and 2022 pulled both closer to 401(k) rules.
The rule
The IRS plan comparison chart shows shared limits and rollover rules; IRC Sec. 402(g) caps 401(k) and 403(b) deferrals together.
Watch out for
Whether 403(b)s should get the same low-cost pooled funds as 401(k)s is a live policy debate in Congress.
▸403(b) & 457(b) plans (nonprofit & government) use the same dollar caps listed in 2026 contribution limits & catch-up rulesLaw or rule (2026)
How they connect
403(b) and governmental 457(b) plans share the 401(k)'s 2026 caps: $24,500 in deferrals, $8,000 extra at 50+, $11,250 at ages 60–63. But the 457(b) limit is separate, so someone with both can double up, and each plan type may offer a special catch-up for long-tenured or near-retirement workers.
When it applies
The IRS announced the 2026 figures in November 2025 (Notice 2025-67); limits reset each January.
The rule
IRC Secs. 402(g), 414(v) and 457(e)(15); IRS Notice 2025-67 lists the figures.
Watch out for
Coordinating special catch-ups with age-based ones is confusing; the plan administrator and a CPA should confirm each year's maximum.