401(k) vs. 403(b) vs. 457 Plans: Comparison & Limits
Quick Answer
2026 limits: $23,500 (all plans), $31,000 (catch-up 50+). 401(k) has employer match, hardship withdrawal. 403(b) for nonprofits/schools. 457 for government (no 10% penalty, separate $23.5k limit). Choose by employer type.
Plan Types & Eligible Employers
| Plan | Employer Type | Employer Match? | Hardship Withdrawal? |
|---|---|---|---|
| 401(k) | Private company | Usually (3–6%) | Yes (loan + hardship) |
| 403(b) | Nonprofit, school, hospital, religious org | Optional | Yes (loan + hardship) |
| 457 | Federal/state/local government | Optional | Yes (loan available) |
2026 Contribution Limits
| Source | Limit | Notes |
|---|---|---|
| Employee deferral | $23,500 | Same across all plans |
| Employer match | Up to $45,500 additional | Varies by plan, employer |
| Catch-up (50+) | $7,500 additional | Total: $31,000 (employee only) |
| Total with match | Up to $69,000 | <50 yrs; $76,500 with catch-up |
401(k) Plan Features
Contributions: Pre-tax or Roth.
Employer Match: Common (average 3–6% of salary). Always take full match—it's free money.
Vesting: Immediate (100%) or graded (25% per year × 4 years typical). Vested amounts = yours if you leave.
Loans: Can borrow up to $50k (or 50% balance). Must repay within 5 years (longer if home purchase).
Hardship Withdrawals: Immediate financial hardship = withdraw early (10% penalty + tax). Medical, education, home purchase examples.
403(b) Plan Features
Contributions: Pre-tax or Roth ($23,500 limit, same as 401k).
Catch-up: Additional $7,500 (age 50+).
Special Rule: If worked 15+ years at nonprofit—eligible for "15-year catch-up" ($3k/year × 5 years). Aggregate limit: $7,500 regular catch-up + $15,000 15-year catch-up.
Vesting: Immediate or graded (employer choice).
No Loan Requirement: Plans not required to offer loans (but many do).
457 Plan (Government Employee)
Separate Limit: $23,500 (independent from 401k/403b). Can max both if you have both.
Contributions: Pre-tax or Roth.
Catch-up: $7,500 (age 50+) OR $23,500 additional in last 3 years (special catch-up).
No 10% Early Withdrawal Penalty: Huge advantage. Age 50+ can withdraw without penalty (if separated from service). Roth conversions easier.
No Loan Requirement: Plans not required to offer loans.
Hardship Withdrawal vs. Loan
Loan:
- Borrow up to $50k (or 50% balance)
- Repay with interest (current prime + 1%)
- Repayment deducted from paycheck
- If leave job: must repay within 60 days or taxable + 10% penalty
Hardship Withdrawal:
- Cannot repay
- 10% penalty (if <59½) + income tax
- Permitted reasons: medical, education, home purchase, funeral, prevent foreclosure
Roth 403(b) & 457 Conversions
Contributions can be Roth (no deduction, tax-free growth). Growing in popularity in nonprofit/government.
How to Choose
- Private Company: 401(k)
- Nonprofit/Education: 403(b)
- Government/State: 457 (often combined with 401k equivalent)
Contribute to all eligible plans if available.