All three let you defer $24,500 of salary in 2026, plus $8,000 at 50 or $11,250 at 60 through 63. The 401(k) and 403(b) share that limit; a governmental 457(b) has its own, so an employee with a 403(b) and a 457(b) can defer into both. The 457(b) also carries no 10% early-withdrawal penalty after separation, at any age. The 403(b) is the odd one out on investments: district vendor lists, often annuities, and a third-party administrator between you and the account.
The three plans, side by side (2026)
| 401(k) | 403(b) | 457(b), governmental | |
|---|---|---|---|
| Who offers it | Private employers | Public schools, 501(c)(3) nonprofits, churches | State and local governments |
| Your deferral limit | $24,500 | $24,500 (shared with any 401(k)) | $24,500 — a separate limit |
| Catch-up at 50 | $8,000 | $8,000 | $8,000 |
| Catch-up at 60–63 | $11,250 | $11,250 | $11,250 |
| Special catch-up | None | 15-year service rule: up to $3,000 a year, $15,000 lifetime, at qualifying employers | Final three years before normal retirement age: up to double the limit ($49,000) |
| Employer money | Match common | Match less common; some districts contribute | Rare |
| Penalty before 59½ | 10%, with exceptions (age 55 separation) | 10%, with exceptions | None on 457(b) money after separation, at any age |
| Investments | Fund menu chosen by the plan | Historically annuities and mutual funds; district vendor lists | Fund menu chosen by the plan |
| ERISA | Usually yes | Governmental and church plans: no | No |
| Rollover to an IRA | Yes | Yes | Yes (governmental only) |
Figures are the 2026 limits from IRS Notice 2025-67 and are re-verified each January.
The pairing that lets you save twice
The deferral limit is a per-person limit under section 402(g), and it is shared between a 401(k) and a 403(b) — put $24,500 in one and there is no room in the other. A governmental 457(b) has its own limit under a different section of the Code. A teacher or a county employee with access to both a 403(b) and a 457(b) can defer $24,500 into each: $49,000 a year under 50, $65,000 at 50, $71,500 at 60 through 63. Nothing else in the retirement code allows one person to double a deferral limit this way, and most people who could use it do not know it exists.
The 457(b) penalty rule
Money deferred into a governmental 457(b) can be withdrawn after you leave that employer at any age with ordinary income tax but no 10% early-distribution penalty. That makes it the natural first account to draw on for a police officer or firefighter retiring at 50, or a teacher leaving at 55. Two cautions: money rolled into the 457(b) from a 401(k) or IRA keeps its original penalty rules, and rolling 457(b) money out to an IRA gives up the exemption. Keep the account until you have used the feature.
What is different about a 403(b)
School districts do not run their 403(b) the way a company runs its 401(k). The district keeps a list of approved vendors, a third-party administrator processes transactions, and the employee chooses among the vendors — some of which sell annuities with surrender charges and fees well above an index fund. The 15-year service catch-up is real but arithmetically fiddly and requires records. Our 403(b) guide covers the vendor question, which is the expensive one.
Non-governmental 457(b) plans
Hospitals and other nonprofits sometimes offer a 457(b) too, and it is a different animal: the money stays the employer's property until paid, sits behind the employer's creditors, and cannot be rolled to an IRA. The same deferral limit applies but none of the governmental plan's protections do. If you are offered one, the question is the employer's balance sheet.
Common questions
Can I contribute to a 403(b) and a 457(b) in the same year?
Yes, up to the full limit in each: $24,500 in the 403(b) and $24,500 in the governmental 457(b) for 2026, plus catch-ups in each. The 401(k)/403(b) limit is shared; the 457(b) limit is separate.
Is there really no early-withdrawal penalty on a 457(b)?
Not on governmental 457(b) deferrals after you separate from that employer, at any age. Ordinary income tax still applies. Amounts rolled in from other plans keep their original rules.
Which should I fund first?
Any employer match first, wherever it is. Then it depends on your exit age: someone retiring before 59½ often favours the 457(b) for the penalty rule; someone with a district 403(b) full of high-cost annuities may favour almost anything else. The order of operations →
Do these limits change?
Every year, by cost-of-living adjustment. The 2026 figures come from IRS Notice 2025-67; we re-verify each January and the date on this page moves when they change.
Have both a 403(b) and a 457(b)?
Most people who can use the pairing were never told. Fifteen minutes.