403(b) vs. 401(k) vs. 457(b)—what's the difference?
If you’ve changed jobs over the years, you may have retirement savings in more than one type of plan, such as a 401(k), 403(b), or 457(b). While all three can help you save for retirement with potential tax advantages, they can have different rules about eligibility, contribution limits, withdrawal rules, and more. Understanding those differences can help you make informed decisions about your retirement savings strategy.
Key takeaways
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What are the different types of employer-sponsored retirement plans?
Employers can offer different kinds of retirement plans, depending on the type of organization. Below are the three main types of employer-sponsored plans, based on IRS rules.
| 401(k) | 403(b) | 457(b) |
|---|---|---|
| Private, for-profit companies, subject to IRS Section 401(k) rules | Public schools, churches, universities, charities, and other 501(c)(3) tax-exempt organizations | State and local governments, schools, churches, and certain non-governmental, tax-exempt entities, generally limited to managers or highly compensated employees |
What are your annual contribution limits?
Each year, the IRS determines how much you can contribute to your plan. Below are the annual contribution IRS limits for the 2026 tax year, along with other key features of 401(k), 403(b), and 457(b) plans.
2026 IRS contribution limits¹
| Plan type | 401(k) | 403(b) | 457(b) |
|---|---|---|---|
Maximum annual employee contribution | $24,500 | $24,500 | $24,500 |
Annual catch-up contribution limit for ages 50 and up | $8,000 | $8,000 | $8,000 |
Super catch-up contribution limit for ages 60-63 | $11,250 | $11,250 | $11,250 |
Maximum annual plan contribution | The lesser of $72,000 or 100% of compensation | The lesser of $72,000 or 100% of compensation | The lesser of $72,000 or 100% of compensation |
Special contributions | Not allowed | Allowed | Allowed |
10% early withdrawal penalty | Yes (unless an exception applies) | Yes (unless an exception applies) | No (except for rollover amounts accepted from a 401(k) or 403(b) plan) |
Roth option (contributions are made after taxes are paid) | Yes | Yes | Yes |
Loan option | Yes | Yes | Yes |
Withdrawal due to financial difficulty | Allowed, subject to 10% early withdrawal penalty | Allowed, subject to 10% early withdrawal penalty | Allowed for unforeseen emergency (no 10% early withdrawal penalty) |
Rolloversto other eligible retirement plans | Yes | Yes | Yes |
The maximum annual plan contribution includes all money contributed to your account by both you and your employer. If you’re a participant in a 401(k) or 403(b) plan, are under 50 years old, and contribute the maximum of $24,500, your employer can still contribute an additional $47,500 for a total of $72,000. If you’re a participant in a 457(b) plan, under 50 years old (or the catch-up provision doesn’t apply to the plan), and you contribute the maximum of $24,500, then the maximum plan limit has been reached, and the employer can't contribute. Alternatively, if you contributed $20,000, your employer could still contribute an additional $4,500, for a total of $24,500. Both 403(b) and 457(b) plans may allow you to save additional amounts—special contributions—above those listed if you meet specific criteria. In some instances, this can double the amount you’re able to save.
Can you contribute to a 401(k), 403(b), and 457(b) at the same time?
Yes, if you happen to have access to more than one type of plan, you can participate in them if you satisfy the plan’s eligibility requirements. Depending on the combination of plans you have, you may be able to save the maximum amount in each plan without one offsetting the other.
Annual contribution limits for a combination of plans1
| Plans you can participate in | Maximum annual contribution |
|---|---|
401(k) and 403(b) | $24,500 total |
457(b) and 401(k) | $24,500 + $24,500 = $49,000 total |
403(b) and 457(b) | $24,500 + $24,500 = $49,000 total |
If one of the plans you participate in is a 457(b), then you can save the maximum amount in both the 457(b) and the other plan. If you participate in a 401(k) and a 403(b), you can save up to $24,500 between the two. For example, if you contributed $10,000 to your 401(k), you'd be limited to saving $14,500 in your 403(b).
Making the most of your employer-sponsored plan
Understanding the differences between 401(k), 403(b), and 457(b) plans can help you make more confident decisions about how much you save, how you manage multiple retirement accounts, and how to maximize your annual contributions. But try not to get too caught up in which specific plan your employer offers. Instead, stay focused on consistently saving for retirement—even small, regular contributions can make a big difference over time.
Need more help? Check out our guide for job changers and retirees.
FAQs
Is a 457(b) better than a 401(k)?
A 457(b) isn’t necessarily better than a 401(k). The right choice depends largely on your employer type and your situation. Governmental employers commonly offer 457(b) plans, while private sector employers typically offer 401(k)s. One key advantage of many governmental 457(b) plans is the ability to take penalty-free withdrawals after leaving a job, regardless of your age, which can provide added flexibility for early retirement or career changes.
Can you contribute to both a 403(b) and a 457(b)?
Yes, in many cases, public employees—such as teachers and government workers—can contribute to both a 403(b) and a 457(b) plan at the same time. Each plan generally has its own contribution limit, which means you may be able to save up to the maximum in both accounts, subject to IRS rules and any restrictions set by your employer.
Which retirement plan has the best tax benefits?
No single retirement plan offers universally better tax benefits, as 401(k), 403(b), and 457(b) plans are generally similar from a tax perspective. All can offer pretax contributions and, in many cases, Roth (after-tax) options, allowing you to choose how and when you’re taxed. The biggest differences often come from employer matching and plan features, not the underlying tax treatment. Your best plan option depends on your personal situation.
What happens to your retirement account when you leave your job?
When you leave a job, the money in your 403(b), 401(k), or 457(b) is still yours—and you’ll need to decide what to do with it. Common options include rolling the balance into your new employer’s plan (if allowed), transferring it to an individual retirement account (IRA), or leaving the assets in your former employer’s plan, if the rules permit. You can also cash out the account, but that can cause you to pay income taxes and, in many cases, early withdrawal penalties, which can reduce your long-term retirement savings.
Can you roll a 457(b) into a 401(k) or IRA?
Yes, you can usually roll a governmental 457(b) into a 401(k), 403(b), or IRA, because these plans are generally eligible for tax-free rollovers under IRS rules. Nongovernmental 457(b) plans, however, are more restricted and typically can’t be rolled into an IRA or qualified plan, and distributions are usually taxable when paid. Before rolling over a 457(b), confirm whether it’s governmental or nongovernmental and review your plan’s specific rules.
Important disclosures
Important disclosures
This content is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.
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