# 401k vs. 457b **URL:** \ **Category:** Factual Questions\ **Created:** [April 19, 2016, 7:39pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668 "2016-04-19T19:39:28Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [April 19, 2016, 7:39pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/1 "2016-04-19T19:39:28Z")
It seems the only difference is that if I have a 457b plan I can take the money out early in an emergency and not suffer the 10% penalty. So assuming my company does not match 401k contributions, why would I pick one over the other? ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [April 19, 2016, 7:40pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/2 "2016-04-19T19:40:59Z")
Oh and I know that 457b contributions do not count towards the $18000 limit for 401k/403b/IRA/RothIRAs. Assume that’s not an issue. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [April 19, 2016, 8:30pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/3 "2016-04-19T20:30:39Z")
Do you have a choice of which you can set up or contribute to? Because my understanding is that 401(k) plans are for for-profit corporations while 457 plans are for governmental organizations and non-profits. ---
**Author:** ![Tired\_and\_Cranky](https://avatars.discourse-cdn.com/v4/letter/t/a87d85/32.png) [@Tired\_and\_Cranky](https://boards.straightdope.com/u/Tired_and_Cranky)\ **Post date:** [April 19, 2016, 8:39pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/4 "2016-04-19T20:39:46Z")
What **Dewey Finn** said. I’ve never heard of an employer offering both a 401(k) and a 457(b). I believe that 457(b) plans are offered solely by state and local government agencies and non-profit organizations. For-profit companies can offer 401(k) plans. Also, IRA contribution limits don’t depend on whether you have either a 401(k) or a 457(b). They do depend on your age (if you are over 50, you can contribute more). The amount you can contribute to a Roth IRA or deduct for a regular IRA depends on your income level. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [April 19, 2016, 9:11pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/5 "2016-04-19T21:11:13Z")
> [@Saint\_Cad](#): > > why would I pick one over the other? 457(b) plans remain the property of the organization/entity you work for, and cannot be rolled into an IRA at a later date. With a 401(k), you are the owner of the account. Should your employer ever go under, your 457(b) may be subject to creditors. > [@Tired\_and\_Cranky](#): > > What **Dewey Finn** said. I’ve never heard of an employer offering both a 401(k) and a 457(b). Could be a gov’t contractor of some sort. It’s not limited to non-profits on the non-governmental side (that’s a 403(b)). ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [April 19, 2016, 10:43pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/6 "2016-04-19T22:43:39Z")
My 457 is solely in lieu of FICA, thus I do not pay the 6.2% towards Social Security. It looks like some employees get a 403b, I don’t think I’m in that role to get that and I’m not sure if they also get the 457. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [April 19, 2016, 10:56pm UTC](https://boards.straightdope.com/t/401k-vs-457b/752668/7 "2016-04-19T22:56:03Z")
> [@Munch](#): > > 457(b) plans remain the property of the organization/entity you work for, and cannot be rolled into an IRA at a later date. With a 401(k), you are the owner of the account. Should your employer ever go under, your 457(b) may be subject to creditors. Surely the money I’ve contributed is safe from contributors? And what about the vested portion of the employer contributions? Is that subject to confiscation by creditors of the employer?