A 457 plan is a tax-advantaged retirement savings plan offered to state and local government employees, as well as some nonprofit workers. Unlike 401(k)s and 403(b)s, 457 plans have a unique advantage: you can withdraw money before age 59½ without the typical 10% early withdrawal penalty if you leave your job. You contribute pre-tax dollars, reducing your current taxable income, and your investments grow tax-deferred until retirement.

The 2025 contribution limit is $23,500, with a $7,500 catch-up contribution for those 50 and older. Even better, 457 plans have a special catch-up provision in the three years before normal retirement age—you can potentially double your contributions. If you're a government employee or work for certain nonprofits, a 457 plan offers flexibility that other retirement accounts don't, particularly if you're planning to retire early or might need to access funds before traditional retirement age.