What Is a 457(b)?
A 457(b) looks almost identical to a 403(b) on the surface — same payroll deduction, same pre-tax-or-Roth choice — but it has two real differences worth knowing before you pick one, the other, or both.
💬 GLP Retirement MinuteThe Basics
Offered through your school district, funded by payroll deduction — separate from, and in addition to, your MPSERS pension.
You choose pre-tax or Roth, same as a 403(b).
Available regardless of your MPSERS plan type.
Where It Actually Differs From a 403(b)
A Separate Limit
A 457(b) has its own IRS contribution limit — it doesn't share a cap with a 403(b) the way a 403(b) shares one with a 401(k). That means you can contribute toward the max on both in the same year, roughly doubling your total sheltered savings capacity.
No Early-Withdrawal Penalty
Once you've separated from service, a governmental 457(b) has no 10% early-withdrawal penalty at any age — unlike a 403(b), which generally does before 59½. This matters a lot if your MPSERS plan lets you retire early.
If you're MIP and eligible for the 46-with-30 early retirement path, this is a genuinely big deal — retiring well before 59½ means a 403(b) withdrawal would typically face a penalty, while a 457(b) withdrawal wouldn't.
See What Is a 403(b)? for the side of the comparison this page assumes you've already read.
A 403(b) and a 457(b) aren't competing options you have to choose between — for most MPSERS members, they're two separate buckets you can both use, each with its own limit. Which one (or both) makes sense depends on your timeline, not just your budget.