457 Withdrawal Calculator

Use this calculator to estimate the net amount you will receive from a 457 plan withdrawal after federal and state income taxes.

Gross Withdrawal Amount ($):

Federal Income Tax Rate (%):

State Income Tax Rate (%):

Withdrawal Summary

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Understanding Your 457 Plan Withdrawals

A 457 plan is a type of deferred compensation retirement plan available to state and local government employees, as well as some non-governmental tax-exempt organizations. It's a powerful tool for saving for retirement, offering tax advantages similar to a 401(k) or 403(b).

Key Features of 457 Plans

Tax-Deferred Growth: Contributions and earnings grow tax-deferred until withdrawal in retirement.
No 10% Early Withdrawal Penalty: Unlike 401(k)s and IRAs, 457(b) plans generally do not impose a 10% early withdrawal penalty for distributions taken before age 59½, provided you have separated from service. This is a significant advantage for those who retire early.
Taxable Withdrawals: All withdrawals from a traditional 457 plan are taxed as ordinary income in the year they are received. This means they are subject to your marginal federal and, if applicable, state income tax rates.
Contribution Limits: Like other retirement plans, 457 plans have annual contribution limits, which can be higher for those nearing retirement.

How 457 Withdrawals Are Taxed

When you take a distribution from your 457 plan, the entire amount is typically considered taxable income. The federal government will withhold a portion for income taxes, and your state (if it has an income tax) may also withhold funds. The calculator above helps you estimate these amounts.

Federal Income Tax: Your withdrawal will be added to your other income for the year and taxed at your marginal federal income tax rate. The IRS generally requires a mandatory 20% federal income tax withholding on eligible rollover distributions, but your actual tax liability could be higher or lower depending on your total income.
State Income Tax: Most states with an income tax will also tax your 457 withdrawals. The rate will depend on your state's tax laws and your overall income. Some states do not tax retirement income, or offer exemptions, so it's important to check your specific state's rules.
No Early Withdrawal Penalty: As mentioned, one of the most attractive features of a 457(b) plan is the absence of the 10% early withdrawal penalty if you separate from service. This means if you retire at age 55, you can access your 457 funds without the additional penalty that would apply to a 401(k) or IRA.

Planning Your 457 Withdrawals

Strategic withdrawal planning is crucial to minimize your tax burden and ensure your retirement savings last. Consider the following:

Tax Brackets: Understand how a large withdrawal might push you into a higher tax bracket. Spreading withdrawals over several years might be more tax-efficient.
Other Income: Factor in other sources of income you might have in retirement, such as Social Security, pensions, or other retirement accounts.
Required Minimum Distributions (RMDs): Eventually, you will be required to take RMDs from your 457 plan (unless it's a governmental 457(b) and you are still working for the employer sponsoring the plan). These typically begin at age 73 (or 75 for those born in 1960 or later).
Roth 457(b) vs. Traditional 457(b): If you have a Roth 457(b), qualified withdrawals are tax-free in retirement, as contributions were made with after-tax dollars. This calculator is primarily for traditional, pre-tax 457 withdrawals.

How to Use the 457 Withdrawal Calculator

Our calculator simplifies the process of estimating your net withdrawal:

Gross Withdrawal Amount: Enter the total amount you intend to withdraw from your 457 plan before any taxes are taken out.
Federal Income Tax Rate: Input your estimated marginal federal income tax rate. This is the rate at which your last dollar of income is taxed. If you're unsure, you can use your current year's tax bracket or consult a tax professional.
State Income Tax Rate: Enter your estimated marginal state income tax rate. If your state does not have an income tax, or if your retirement income is exempt, enter '0'.
Calculate: Click the "Calculate Withdrawal" button to see a breakdown of estimated taxes and your net withdrawal amount.

Example Scenario:

Let's say you plan to withdraw $25,000 from your 457 plan. You estimate your federal marginal tax rate to be 24% and your state marginal tax rate to be 6%.

Gross Withdrawal: $25,000.00
Federal Tax (24%): $25,000 * 0.24 = $6,000.00
State Tax (6%): $25,000 * 0.06 = $1,500.00
Total Tax: $6,000 + $1,500 = $7,500.00
Net Withdrawal: $25,000 – $7,500 = $17,500.00
Effective Tax Rate: ($7,500 / $25,000) * 100 = 30.00%

This calculator provides a helpful estimate, but for precise tax planning, always consult with a qualified financial advisor or tax professional who can consider your unique financial situation and the latest tax laws.