Q.: I have underfunded my 457(b) account and will be retiring in five years. Is there a way to make some big contributions to my account? P.G.
A.: Section 457(b) of the Internal Revenue Code allows you to contribute twice the annual maximum for each of the three years prior to your retirement. This catch-up provision is called Deferral Acceleration for Retirement (DAR) and is available only to 457(b) savers. For 2021 the annual maximum is $19,500; therefore, you can contribute $39,000 per year for each of the three years prior to retiring. This translates into a total three-year contribution of $117,000. In my view, this money should be invested in the Roth feature of your 457(b) account.
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