# 457 Plan

*Retirement & Benefits — Finicade finance glossary*

A 457(b) is a deferred compensation plan for state and local government employees, with no 10% early withdrawal penalty once you leave the employer.

A 457(b) is a deferred compensation plan for state and local government employees, and it has one standout advantage: no 10% early withdrawal penalty once you leave the employer, whatever your age. Someone retiring at 52 can draw on it immediately while their 401(k) stays locked. Employees offered both a 457 and a 403(b) can generally contribute the full limit to each, effectively doubling their sheltered space.

**Also known as:** 457(b), deferred compensation plan for government workers

**Related terms:** [401(k)](https://finicade.com/glossary/401k), [403(b)](https://finicade.com/glossary/403b), [Early Withdrawal Penalty](https://finicade.com/glossary/early-withdrawal-penalty), [Deferred Compensation](https://finicade.com/glossary/deferred-compensation), [Contribution Limit](https://finicade.com/glossary/contribution-limit)

Source: https://finicade.com/glossary/457-plan