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Tax Benefits

The tax benefits of participating in the RIC 457 plan differ depending on whether you elect for your deductions to be taken from your paycheck before or (if your employer plan allows Roth contributions) after taxes.

Saver's Tax Credit: You may be eligible for up to a $1,000 tax credit read more...

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Pretax

Post-tax Roth (if available)

Contributions

Made before state and federal tax withholding

Made after state and federal tax withholding
See Roth 457 Summary for more information.

Immediate benefit

Lower taxable income for the year None

Earnings (if any)

Grow tax-deferred Grow tax-free

Distributions

Taxable as ordinary income Tax-free if qualified

 

Qualified Roth Distribution

Roth 457 earnings are tax-free if the Roth participant meets all 3 of these requirements.

  1. A distributable event has occurred
  2. Roth account is held 5+ years, and
  3. The participant is age 59½ or older, disabled, or deceased.

If one or more of these requirements are not met, it is considered a non-qualified Roth distribution and subject to taxation on the earnings portion of the distributed amount.

Roth contributions were invested after taxes were withheld so distributions of Roth contributions are tax-free.

 

 

 


Public Employees (non-state)