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The 457 plan is a type of non-qualified tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre-tax basis. For the most part the plan operates similarly to a 401(k) or 403(b) plan most people are familiar with in the US. The key difference is unlike a 401(k) plan, there is no 10% penalty for withdrawal before the age of 59½ (although the withdrawal is subject to ordinary income taxation). Another difference is that 457 plan participant cannot make designated Roth contributions as participants in appropriately amended 401(k) and 403(b) plans can. Also 457 plans (both governmental and non governmental) can allow independent contractors to participate in the plan where 401(k) and 403(b) plans cannot.