457(b) Deferred Compensation Plan (DCP)

A 457(b) is a Deferred Compensation Plan (DCP) that allows employees of educational institutions and certain tax-exempt organizations to save pre-tax dollars for retirement. A 457(b) works much like a 403(b) plan in terms of taxes and loans and can offer another way to save for retirement. Some school districts sponsor 457(b) plans in addition to offering a 403(b) plan.

The RBFCU Retirement Program is available to employees in school districts and certain tax-exempt organizations within the state of Texas. With our financial advisors, you can create a plan you’ll feel confident about.

What you should know about a 457(b):

Tax form and calculator


Contributions are made to your 457(b) before taxes are taken from your paycheck, reducing your taxable income. Taxes are paid on withdrawals, typically in retirement.

Hand withdrawing money


Regardless of age, you may withdraw from your 457(b) when you leave your employer, or in the case of death or unforeseen emergency. You may be required to pay income tax on the amount withdrawn.

Hand giving money


If plan allows, a loan may be taken against your 457(b) funds regardless of your employment status. Repayment terms and interest rates are determined by your investment provider. Certain rules may apply.

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To learn more about the RBFCU Retirement Program and benefits of enrolling, contact us at:

  • What will my income be after I retire?
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  • What will my expenses be after I retire?
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  • How much can I contribute to a 457(b) plan?
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    In 2023, you may contribute up to $22,500 to a 457(b). If you are over age 50, you may contribute an additional $7,500 annually in 2023. This limit is separate from the 403(b) limit.

  • Are there any additional contribution catch-up provisions for the 457(b) plan?
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    Depending on your district plan, for the year 2023, you may be able to add up to an additional $22,500 in addition to the standard limit of $22,500. This cannot be used with the age 50+ catch-up provision. This catch-up is used during your final 3 years before retirement age (deemed as age 62 or 65, depending on your district plan). You must qualify every year through your district’s administrator.

  • What is the difference between a 457(b) plan and a 403(b) plan?
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    Both types of plans are tax deferred, but the 457(b) lets you start withdrawing money from your account as soon as you stop working for the sponsoring employer, no matter your age or in the case of death, disability or unforeseen emergency, regardless of your age if certain requirements are met. Meanwhile, 403(b) plans allow standard, penalty-free withdrawals at age 59½, as well as limited early withdrawal exceptions.

Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Ameriprise Financial Services has a partnership with this financial institution to provide financial planning services and solutions to clients. The financial institution is not an investment client of Ameriprise but has a revenue sharing relationship with us that creates a conflict of interest. Details on how we work together can be found on ameriprise.com/sec-disclosure.

Ameriprise Financial is not affiliated with the financial institution.

RBFCU Retirement Program, a financial advisory practice of Ameriprise Financial Services, LLC, is a division of RBFCU Investments Group LLC.

The initial consultation provides an overview of financial planning concepts. You will not receive written analysis and/or recommendations.

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.

Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser.

Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.