Project 457(b) balance for government and tax-exempt employees. No early withdrawal penalty after separation.
Projected balance
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Total contributed
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Investment growth
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The quiet superpower of a 457(b)
A 457(b) is a deferred compensation plan for state and local government workers and certain tax-exempt employers. On the surface it looks like a 401(k): pre-tax contributions, tax-deferred growth, a $23,500 elective limit for 2026. Two features make it unusually powerful. First, a governmental 457(b) has no 10 percent early-withdrawal penalty once you separate from service, even before age 59 and a half. Second, its contribution limit does not aggregate with a 401(k) or 403(b), so an employee offered both can fund each to the max in the same year. This calculator projects a single account's growth from a flat annual contribution.
It speaks to public-sector employees, especially those eyeing an early exit, who want to see what a steady contribution becomes over a full career. The tool caps your entry at the $23,500 limit, so a larger figure is trimmed to the legal ceiling before compounding.
Funding $15,000 a year for 25 years
Take a state employee who sets aside $15,000 a year, well under the cap, for 25 years at a 7 percent assumed return. Each year the contribution lands and the balance grows. The result is a projected $1,015,147. Total contributions add up to $375,000, which means about $640,147 of the ending balance is pure investment growth. That ratio, roughly 63 cents of every final dollar coming from compounding, is the entire argument for starting early.
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The chart shows contributions and growth side by side at the end of the 25 years.
The stacking move that doubles your tax-deferred space
The feature that most public employees overlook is that a 457(b) limit stands on its own. A teacher who has both a 403(b) and a governmental 457(b), or a state worker with both a 457(b) and a 401(k), can contribute the full $23,500 to each in the same year, sheltering $47,000 of income from current tax. That is a rare gift in the tax code, and it makes the 457(b) the single best place for a high-saving government worker to put the next dollar after the first plan is maxed. This calculator models one account at a time, so if you are stacking two plans, run it twice and add the results to see the combined picture. The earlier in your career you start using both buckets, the more dramatic the compounding gap becomes.
Where the early-retirement edge really shows
Say a firefighter retires at 52. Money in a 401(k) or IRA generally cannot be touched penalty-free until 59 and a half without jumping through Rule 72(t) hoops. A governmental 457(b) hands over the balance penalty-free the moment service ends, with only ordinary income tax due. For someone bridging the gap between an early pension and traditional retirement age, that flexibility can be worth more than a slightly higher return. One caution: 457(b) plans at non-governmental tax-exempt employers do not share this protection and carry creditor risk, so confirm which kind you have.
Questions readers raise
Is there a special catch-up before retirement?
Yes. Many governmental plans offer a final three-year catch-up that can let you contribute up to twice the normal limit in the years approaching your plan's normal retirement age, intended to let you make up underused contributions. This calculator does not model that provision, so your real ceiling in those years may be higher than the figure shown here.
Can I roll a 457(b) into an IRA later?
A governmental 457(b) can roll into an IRA or another eligible plan. Be aware that once you move the money into an IRA, it picks up the IRA's early-withdrawal rules, so you would forfeit the penalty-free access that made the 457(b) attractive in the first place. Many early retirees deliberately leave funds in the 457(b) for that reason.