What is a primary characteristic of a 457 plan?

A primary characteristic of a 457 plan is that it is available to state and local government employers and certain non-profit organizations. These plans are designed specifically for employees of governmental entities and select non-profit organizations, allowing them to save for retirement while benefiting from tax-deferred contributions.

This characteristic distinguishes 457 plans from other types of retirement plans, such as 401(k) plans, which are typically available to for-profit organizations. The ability for certain non-profit organizations to offer 457 plans also makes them unique when compared to other retirement savings options.

In addition to being restricted to specific employers, 457 plans often have different rules around contributions and withdrawals, making them particularly suited for employees in these sectors. Understanding this aspect of 457 plans helps in recognizing their purpose and applicability in the landscape of retirement savings options available to various types of employers.