403(b) vs 457(b) Calculator 2026
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.
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 ($23,500 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 take out $50,000 from a 403(b) at age 56, you owe $5,000 to the IRS before paying a dollar of income tax. The same withdrawal from a 457(b) costs nothing extra. Just ordinary income tax, same as if you had waited.
For a teacher planning to retire at 55 or 58, this is not a minor footnote. It can mean $30,000 to $80,000 in penalty payments over the first few years of retirement. The calculator above shows the exact cost at various 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 roughly $91,000. Don't leave it behind to chase penalty-free access.
The 2026 contribution limits
Both plans share the same employee deferral limit: $23,500 for 2026. If you are 50 or older, both allow an additional $7,500 catch-up. Combined, a teacher maxing both plans can shelter $47,000 per year from federal income tax, or $62,000 with catch-up contributions. 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.
Frequently asked questions
What is the difference between 403(b) and 457(b)?
Same contribution limits ($23,500 in 2026), same tax deferral, different early withdrawal rules. The 403(b) imposes a 10% penalty before age 59.5. 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 $23,500 to each in 2026 for a combined $47,000, or $62,000 with age-50 catch-ups. 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. A $200,000 withdrawal at 57 costs $20,000 less from a 457(b) than from a 403(b). That is not hypothetical math; it is the actual IRS rule.
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).