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Which Is Better: 401(k) or 457?

Learn the differences and similarities between a 401(k) and 457 retirement savings plan.

By Motley Fool Retirement Team – Updated Nov 25, 2024 at 9:04PM

Key Points

  • 401(k) plans enforce a 10% penalty on early withdrawals before age 59 1/2.
  • 457 plans allow extra catch-up contributions for those within three years of retirement.
  • 457 plans are commonly offered to government workers, while private-sector companies offer 401(k)s.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

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