Why 457(b) is the Best Retirement Savings Plan

My favorite retirement savings plan is the super-popular 457(b). Not only is it exempt from the 10-percent penalty tax which, unfortunately, applies to pre-age-59½ withdrawals from 403(b)/401(k) plans, it offers an extremely generous catch-up provision that should be used by those who have not taken full advantage of their opportunity to save for retirement.

We call this catch-up Deferral Acceleration for Retirement, or DAR. DAR allows an eligible investor to contribute on an annual basis two times the pre-age-50 maximum amount for three consecutive years. The current pre-age-50 maximum contribution is $18,000. So one who has underfunded his/her 457(b) account may contribute a maxi­mum of $108,000 during the three-year period ($18,000 x 2 = $36,000 x 3 = $108,000). Here is the link to the DAR Form along with a detailed description of this 457(b) catch-up opportunity. (goo.gl/R6bGxr. Please contact me with your questions.)