Section 457 Deferred Compensation Plan

Episode 457 breaks down one of the more misunderstood retirement vehicles in public-sector planning: the Section 457 deferred compensation plan. While 457 plans often resemble 401(k)s on the surface, they offer a powerful tax advantage that many municipal employees, police officers, and hospital workers overlook: penalty-free access before age 59½. We cover how 457 plans work, why rolling them into an IRA too early can be a costly mistake, and how these plans can support long-term compounding, tax efficiency, and longevity in retirement. Key Takeaways - A section 457 deferred compensation plan may allow penalty-free withdrawals before age 59½ - Early IRA or 401(k) withdrawals (prior to age 59 1/2) usually trigger a 10% tax penalty - A large section 457 deferred compensation plan may often have low investment expenses - Rolling a 457 into an IRA too early might eliminate a major tax advantage #Section457, #section457deferredcompensation, #NYSDCP, #457Plan, #DeferredCompensation, #RetirementPlanning, #PublicSectorRetirement, #MunicipalEmployees, #PoliceRetirement, #EarlyRetirementPlanning, #TaxEfficientRetirement, #PenaltyFreeWithdrawals, #401kVs457, #IRAWithdrawals, Mullooly Asset Management is a fee-only investment advisory firm located in Monmouth County, NJ. We work to educate our clients regarding managing the risk in their investments. We act in a fiduciary capacity with our clients at all times. Our family of investments advisors (Tom, and his three sons - Brendan, Tim and Casey) are all CFP® Professionals. To our knowledge, WE ARE THE ONLY FAMILY firm - in the nation - with four fiduciary, fee-only investment advisors who all have earned CERTIFIED FINANCIAL PLANNER™ certification. The "Mullooly Asset Show," has over 350 episodes and over 450 unique podcasts, which can be found on the site https://www.mullooly.net. The "Mullooly Asset Show" answers questions and cover topics that YOU bring up. Our topics and questions range from those brought up, or sent in, by our viewers. Get in touch with us here: Mullooly Asset Management 1971 State Route 34 Wall Township, New Jersey 07719 Phone: 732-223-9000 Website: https://mullooly.net Facebook: www.facebook.com/MulloolyAsset Twitter: @mulloolyasset LinkedIn: @mullooly-asset-management Email: [email protected] This content is provided for informational purposes only and does not constitute personalized investment, tax, legal, or accounting advice, and should not be relied upon as such. Mullooly Asset Management, Inc. is not endorsing practices, products, or services that may be mentioned, and highly recommend consulting with a licensed financial professional about your own specific goals and circumstances prior to engaging in any financial decisions. Investing involves the risk of loss. Employees of Mullooly Asset Management, Inc. may maintain positions in securities discussed, however absolutely none of this is a solicitation or recommendation to buy or sell. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decisions. Past performance is not indicative of future results. This content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice.