457 Plan Contribution Limits for 2025
There are higher 457 plan contribution limits for state and local government workers in 2025. That's good news for state and local government employees


State and local government employees can invest more in their 457 plans in 2025 than in 2024. Similar to the better-known 401(k) plan in the private sector, the 457 plan (sometimes called a "457(b) plan") allows employees to deposit a portion of their pre-tax earnings in an investment account.
The 457 plan is also a tax-advantaged account; employees postpone paying taxes on the money invested in the 457 until the funds are withdrawn after they retire. As such, these plans can help government workers with their retirement planning.
Unlike most other retirement accounts, there are two types of catch-up contributions for 457 plans: the age 50+ catch-up provision and the pre-retirement 3-year catch-up provision.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
457 plan contribution and catch-up limits for 2025
The maximum amount you could contribute to a 457 retirement plan in 2024 was $23,000, including any employer contributions. That amount increases to $23,500 in 2025.
For example, if your employer contributes $5,000, you can contribute up to $18,500 to meet the annual limit. (Most 457 plans, however, don't match worker contributions).
The age 50+ catch-up provision. If you're 50 or older, your 457 plan may allow you to contribute an additional $7,500 as a "catch-up" contribution, bringing your total allowable contribution to $31,000 in 2025.
SECURE 2.0 catch-up contributions 60-63:
Starting in 2025, SECURE 2.0 enhances catch-up contributions for certain older adults. If you’re 60, 61, 62, or 63 in 2025, you may be able to take advantage of this provision and increase your savings for retirement. If you're 59 or 64, this super catch-up contribution does not apply.
This 60-63 catch-up contribution limit in 2025 is $10,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater.
For example, the catch-up limit for those age 50+ in 2025 is $7,500. The enhanced catch-up contribution limit for those age 60-63 is $11,250. Remember that once you reach 64, these limits revert back to the standard age 50+ catch-up contribution limit.
No double-dipping. However, if you are eligible for both the 50-plus and 3-year catch-up contributions, the IRS will only allow you to take advantage of the one that adds the most to your retirement account. You can’t do both.
Benefits of a 457 retirement plan
As with contributions to a traditional 401(k) or to a 403(b), your money goes into a 457 plan before you pay income taxes on it. That means the pretax contributions lower your current taxable income. Meanwhile, your contributions and earnings grow tax-sheltered until you withdraw them. Unlike many other retirement accounts, the IRS doesn't penalize you for taking early withdrawals from a 457 account before age 59-1/2. But you will pay regular income tax on all withdrawals.
Some 401(k) plans in the private sector automatically enroll workers. But 457 plans generally do not permit auto-enrollment because of state or local laws. So, the first step in benefiting from this retirement vehicle is to sign up.
How is a 457 different from a 401(k)?
401(k) and 457 retirement plans have similarities and differences to consider. The most obvious difference is that 457 plans are primarily offered to government employees, including state and local government officials, city and county employees, public school teachers and first responders. By contrast, 401(k) retirement plans are typically offered by private employers.
401(k) plans | 457 plans |
Commonly offered to government workers | Offered to private-sector employees |
Generally, employers match employee contributions | Rarely match employee contributions |
10% penalty on early withdrawals before age 59-1/2 | Withdrawals before the age of 59-1/2 are not subject to a 10% penalty |
Roth options are available | Roth options are available |
Loans are allowed | Loans are allowed |
Often offer auto-enrollment | Generally do not permit auto-enrollment |
Best investments for a 457 plan
After you sign up, do your due diligence regarding investment options. Fees and other costs are always important when evaluating investments.
More 457 plans are adding target-date mutual funds that take much of the investment decision-making out of workers' hands. With target-date funds, a worker chooses the fund whose name includes the year closest to his or her expected retirement date. In 2025, a worker planning to retire in about 20 years would select a target-date fund with a year close to 2045 in its name. (Target-date funds typically are named in five-year increments: 2035, 2040, 2045 and so on.) These funds invest aggressively when workers are young and gradually become more conservative as retirement approaches.
For example, a target-date fund meant for workers in their twenties holds mostly stocks. But investments in a target-date fund for someone nearing retirement age may be split evenly between stocks and bonds.
Besides target-date funds, 457 plans generally offer a lineup of index funds, actively managed stock mutual funds and fixed-income funds. They also offer managed-accounts, which are professionally managed to match your financial goals and risk tolerance.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.
- Jackie StewartSenior Retirement Editor, Kiplinger.com
- Donna LeValleyRetirement Writer
-
Ask the Editor: Four Reader Tax Questions
Ask the Editor In our new Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions on reporting income and tax deductions on 2024 tax returns.
By Joy Taylor Published
-
This Surprisingly Versatile Account Should Be in Your Retirement Plan
The Swiss Army knife of accounts can help provide tax-free income in retirement. 'Be Prepared.'
By Maurie Backman Published
-
Choosing a Trustee? These Six Tips Can Help You Pick Wisely
How can you be sure a trust will be managed properly, without causing a headache for the beneficiaries? The key is choosing the right trustee (and a backup).
By Adam Frank Published
-
Is Your Cryptocurrency Safe? How to Shield Digital Assets
Creditors, hackers and frivolous lawsuit filers could be coming for your cryptocurrencies. These estate planning and asset protection strategies could help.
By Jeffrey M. Verdon, Esq. Published
-
How Savvy Is Your Financial Adviser? Three Ways to Find Out
Don't be afraid to ask your adviser if they're keeping up with industry developments and their own training. How else can you know they're giving good advice?
By Sean Walters, CAE® Published
-
IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
An IRA conversion can give you a leg-up in retirement with tax-free income. But proceed with caution.
By Maurie Backman Published
-
Retirement Savings on Track? How Much You Should Have by 55 and 60
JPMorgan’s guide can help older Gen Xers determine whether they have saved enough for a retirement pegged to their income level.
By Donna Fuscaldo Published
-
Create a Family Dynasty for Lasting Security
The super-rich rely on the family dynasty model to pass assets down from generation to generation. Here's how to embrace those strategies.
By Adam Shell Published
-
How Financial Advisers Can Build Retiring Clients' Confidence
Financial professionals can help families and individuals plan for a fulfilling future in a shifting retirement space.
By Jake Klima Published
-
Loneliness a Risk When Retiring Abroad, Says New Study
More Americans want to retire abroad, but loneliness can undermine your happiness and health, even in paradise. Here's how to avoid loneliness abroad.
By Christy Bieber Last updated