The 403(b) and 457(b) voluntary deferred compensation plans are available to active employees. They allow for the investment of pre-tax earnings, through automatic payroll deductions, to save for retirement.
Any investment gains/losses are tax-deferred until withdrawn. Contributions may also lower current income taxes.
403(b) Plan 457(b) Plan
10% early withdrawal federal tax penalty if not age 59½ regardless of separation from service.
No 10% early withdrawal federal tax penalty after separation from service. Withdrawals made prior to separation from service or prior to age 59½ can only be made due to financial hardship. Withdrawals made prior to separation from service or prior to age 70½ can only be made in an unforeseeable emergency.