The 457(b) plan is a tax-advantaged retirement savings plan for employees of state and local governments and certain tax-exempt organizations. Contributions to a 457(b) plan are made on a pre-tax basis, meaning that they are deducted from your paycheck before taxes are calculated. This reduces your current taxable income and can save you money on taxes.
The maximum amount that you can contribute to a 457(b) plan in 2025 is $22,500. This limit is set by the Internal Revenue Service (IRS) and is adjusted each year for inflation. In addition to the regular contribution limit, you may also be able to make catch-up contributions if you are age 50 or older. The catch-up contribution limit for 2025 is $7,500.
