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401(k) Plan vs. 457 Plan: What's the Difference?

401(k) Plan vs. 457 Plan: What's the Difference?

401(k) plans and 457 plans are two types of IRS-sanctioned, tax-advantaged employee retirement savings plans. As workplace pensions become obsolete, however, personal retirement savings has increasingly come to serve as most people's primary retirement plan, along with Social Security. 401(k) plans and 457 plans operate similarly, with the main difference being who is allowed to participate in each one.