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Adjusting your 457 plan contributions is important when experiencing life changes such as a new job, a raise, or a change in financial circumstances. Proper adjustments can help maximize your retirement savings and ensure your contributions align with your current financial goals.
Understanding Your 457 Plan
A 457 plan is a type of retirement savings account available to certain government and nonprofit employees. It allows for pre-tax contributions, which can reduce taxable income and grow tax-deferred until withdrawal.
When to Adjust Contributions
Life events such as changing jobs, receiving a bonus, or experiencing financial hardship may require you to modify your contribution rate. Regularly reviewing your plan helps ensure your savings stay aligned with your retirement goals.
How to Make Adjustments
Most employers allow you to change your contribution amount through your online account or benefits portal. It is recommended to review your current contribution rate and update it as needed, especially after significant life changes.
- Log into your employer’s benefits portal
- Select your 457 plan options
- Adjust your contribution percentage or amount
- Confirm and save your changes
Additional Tips
Consider consulting with a financial advisor to determine the optimal contribution rate based on your current financial situation and retirement goals. Also, be aware of contribution limits set by the IRS to avoid exceeding annual maximums.