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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 9:04 PM

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.
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