Which should I contribute to first, 403(b) or 457(b)?

It depends on your retirement age. If you plan to retire before 59.5, prioritize the 457(b) first. Any money you withdraw from a 403(b) before 59.5 costs an extra 10% on top of ordinary income tax. If you plan to retire at 59.5 or later, maximize employer matching contributions to the 403(b) first. That match is an immediate 50-100% return that no other account can match. After capturing the full match, contribute to the 457(b) if you have additional savings capacity.

403(b) vs 457(b) Calculator 2026

Q: What is the difference between 403(b) and 457(b)?

Both are employer-sponsored retirement plans with identical contribution limits ($24,500 in 2026, plus $8,000 catch-up at 50+), but they differ on one major point: the 457(b) has no 10% early withdrawal penalty. A 403(b) triggers the standard 10% IRS penalty on withdrawals before age 59.5 unless you left the employer in or after the year you turned 55, or another exception applies. The 457(b) imposes no penalty at any age once you separate from your employer. For teachers and government employees planning to retire before 59.5, this distinction is worth tens of thousands of dollars.

Q: Can I contribute to both a 403(b) and 457(b) at the same time?

Yes. The IRS treats 403(b) and 457(b) contribution limits as completely separate. In 2026, you can contribute up to $24,500 to each plan, for a combined $49,000 in employee contributions. If you are 50 or older, you can add $8,000 in catch-up contributions to each plan, bringing the combined maximum to $65,000 ($71,500 at ages 60-63). This dual-contribution opportunity is one of the most powerful tax-deferral advantages available to public school teachers and government employees.

Q: Is 457(b) better for early retirement?

For most early retirees with access to both plans, yes. The 457(b) lets you withdraw money immediately after separating from your employer without the 10% early withdrawal penalty that the 403(b) carries before age 59.5. A teacher who retires at 55 with $300,000 in a 457(b) can withdraw those funds paying only ordinary income tax. The same $300,000 in a 403(b) would cost an additional $30,000 in penalty. The 457(b) does not have the age-55 separation exception that some 401(k) and 403(b) plans offer, but it beats them all by simply having no penalty at any age.

Q: Do employers match 457(b) contributions?

Rarely. Employer matching contributions to 457(b) plans are uncommon. Most school districts and government employers that offer 457(b) plans do not match contributions to them, reserving any matching dollars for the 403(b) or 401(a). There are exceptions, particularly in some state and local government plans, but a 457(b) match should be considered a bonus rather than an expectation. This is why the standard guidance is to capture the full 403(b) employer match before directing extra dollars to the 457(b).

Teachers and state employees often have access to both plans. The limits are identical. The early withdrawal rules are not. This calculator shows you exactly what each plan is worth based on your retirement date.

Current Age

Planned Retirement Age

20 years to retirement

Annual Contributions

403(b)

Limit: $24,500 + catch-up if 50+. Include any catch-up in the amount you enter.

457(b)

Separate limit, stacks with 403(b)

Age 50+ catch-up (raises each plan's limit by $8,000)

Age 60-63 super catch-up (raises each plan's limit by $11,250)

SECURE 2.0 Act. Replaces the standard $8,000 catch-up for ages 60-63 only. These toggles raise the limit; the calculator uses the amounts you enter. If your 2025 wages topped $150,000, catch-ups must be Roth.

403(b) 15-year rule (limit +$3,000/yr until $15,000 is used, 403(b) only)

IRC 402(g)(7). 15+ years with the same employer. $15,000 lifetime max. Does not apply to 457(b).

457(b) plan normal retirement age (0 = skip)

In the 3 years before your plan's normal retirement age, the 457(b) limit doubles to $49,000 (2026). This replaces the age-based catch-up if higher. Set to 0 to skip.

Annual Salary

Used to calculate the 403(b) employer match amount.

403(b) Employer Match (% of salary)

3.0%

$2,250/yr from employer. Most school districts match 1-4%.

Return Rate7%

3%12%

State Tax Rate5%

0%13%

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The one difference that actually matters

Teachers who have access to both a 403(b) and a 457(b) are looking at two plans with the same annual limit ($24,500 in 2026), the same tax treatment, and often the same investment options through the district's approved vendors. So why does it matter which one you use?

One reason: early withdrawal. The 403(b) imposes a 10% IRS penalty on withdrawals before age 59.5. The 457(b) has no such penalty. If you left your job at 53 and take out $50,000 from the 403(b) at 56, you owe $5,000 to the IRS before paying a dollar of income tax. Leave in or after the year you turn 55 and that 403(b) penalty goes away too (the age-55 separation rule). The same withdrawal from a 457(b) costs nothing extra. Just ordinary income tax, same as if you had waited.

So the 457(b) advantage is biggest for people who leave before the year they turn 55, and for anyone who rolls a 403(b) into an IRA (which loses the age-55 rule). The calculator applies the age-55 rule based on your retirement age and shows the cost at four ages.

Why the employer match complicates things

School districts rarely match 457(b) contributions. Some offer a 403(b) match, typically 1 to 4 percent of salary. If your district matches the first 3% of your 403(b) contributions, that match is free money with an immediate 100% return. No investment can reliably beat it.

The right order for most early retirees: contribute enough to the 403(b) to capture the full employer match, then direct every additional dollar to the 457(b). You get the match benefit and the early withdrawal flexibility. If your district matches 3% on a $70,000 salary, that's $2,100 per year in free contributions. Over 20 years at 7%, that's about $86,000. Don't leave it behind to chase penalty-free access.

The 2026 contribution limits

Both plans share the same employee deferral limit: $24,500 for 2026. If you are 50 or older, both allow an additional $8,000 catch-up ($11,250 at ages 60-63). Combined, a teacher maxing both plans can shelter $49,000 per year from federal income tax, or $65,000 with age-50 catch-up contributions. If your 2025 wages from the employer topped $150,000, those catch-ups must be Roth. Almost nobody does this, but the option exists.

The 457(b) also has a separate "last three years" provision: within three years of the plan's normal retirement age, participants can contribute up to double the standard limit, using unused room from prior years. This is plan-specific and requires your employer's 457(b) plan to allow it.

Governmental vs. non-governmental 457(b) plans

State and local government employees typically have governmental 457(b) plans. These can be rolled over to an IRA when you leave your job, just like a 401(k). Non-governmental 457(b) plans, offered by some private nonprofits and hospitals, cannot be rolled to an IRA and are subject to the employer's creditors if the organization faces financial distress.

If you work for a public school district or state agency, you almost certainly have a governmental plan. If you are at a private nonprofit, confirm before assuming your 457(b) has the same flexibility.

When the 403(b) wins

Retiring at 62 or later? The penalty advantage of the 457(b) disappears. Both plans are equally accessible after 59.5. At that point, the 403(b) often wins on employer match and, in some districts, on investment options. The 403(b) also has the 15-year service rule, which lets employees with 15 or more years at the same qualifying employer contribute an additional $3,000 per year (up to $15,000 lifetime). The 457(b) has no equivalent provision.

The choice is not always obvious, and it depends on your specific retirement age, your employer's match, and how long you plan to need penalty-free access before 59.5.

Roth vs. traditional in each plan

Many 403(b) and 457(b) plans now offer Roth options. A Roth contribution goes in after tax and comes out tax-free in retirement. For early retirees, Roth 457(b) contributions can be especially attractive: you contribute after tax, the money grows tax-free, and you can withdraw it after separation without the 10% penalty and without income tax. That is a powerful combination for anyone planning a long early retirement.

Whether Roth or traditional makes more sense depends on your current tax bracket versus your expected bracket in retirement. Most teachers in the 22% bracket today will be in a lower bracket in retirement, making traditional contributions the better call. But it is not universal.

Related calculators

403(b) Calculator

Project your 403(b) balance at retirement with the 15-year rule option

457(b) Calculator

Model your 457(b) with the 3-year special catch-up provision

FERS Pension Calculator

Federal employees: calculate your defined benefit pension

Frequently asked questions

What is the difference between 403(b) and 457(b)?

Same contribution limits ($24,500 in 2026), same tax deferral, different early withdrawal rules. The 403(b) imposes a 10% penalty before age 59.5 unless you left in or after the year you turned 55. The 457(b) imposes no penalty at any age after you leave your employer. For anyone planning an early retirement, that difference is significant.

Which should I contribute to first?

Capture the employer match in the 403(b) first, then direct extra savings to the 457(b) if you plan to retire before 59.5. If you will retire at 59.5 or later, the order matters less. Many teachers should max the 457(b) before adding more to the 403(b) beyond the match, specifically because of the penalty-free access.

Can I contribute to both a 403(b) and 457(b) at the same time?

Yes. The IRS treats these as entirely separate limits. You can contribute $24,500 to each in 2026 for a combined $49,000, or $65,000 with age-50 catch-ups ($71,500 at ages 60-63). Teachers who can afford to max both have one of the best tax-deferral opportunities in the US retirement system.

Is 457(b) better for early retirement?

Generally yes, if you will need the money before 59.5. The absence of the 10% penalty is a real, calculable advantage. If you separate before the year you turn 55, a $200,000 withdrawal at 57 costs $20,000 less from a 457(b) than from a 403(b). Separate at 55 or later and the 403(b) is penalty-free from then on too.

Do employers match 457(b) contributions?

Usually no. Most districts offer a 403(b) match and nothing for the 457(b). Some governmental plans do contribute, so check your plan documents. But in the public school context, the 457(b) is almost always an employee-only account. The match advantage sits with the 403(b).