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Subject:  What am I missing about my 457 plan? Date:  7/11/2020  9:12 PM
Author:  ADAKing Number:  130899 of 131264

Hello All -

I feel like this is a simple thing but there is something I'm just not getting. I have a 457 Deferred Compensation plan at work. I have been contributing pre-tax money for years but they have recently made the account eligible for Roth contributions as well.

I believe the difference is that the earnings from the Roth contributions will not be subject to tax, (just like a Roth IRA), whereas earnings from the pre-tax contributions would be subject to tax later. I switched to making Roth contributions several months ago.

What I'm not wrapping my head around is that the 457 account has both pre-tax and Roth money in the same account. I do not understand how contribution before tax and after tax can be co-mingled when earnings from those amounts are treated differently later.

If that question makes sense to someone, what am I missing here??

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