What Are the 457(b) Maximum Contribution Limits?

A 457(b) plan is a tax-advantaged retirement savings plan for employees of state and local governments and certain non-profit organizations. These plans allow employees to defer a portion of their compensation, with the funds growing tax-deferred until withdrawal. The Internal Revenue Service (IRS) sets annual contribution limits, which include standard deferrals and catch-up provisions based on age and proximity to retirement.

Standard Contribution Limits

The standard elective deferral limit for 457(b) plans in 2025 is $23,500. This figure, also known as the 402(g) limit, represents the maximum amount a participant can contribute from their salary during the calendar year, unless they qualify for a catch-up contribution.

Governmental 457(b) plans provide catch-up contributions for those nearing retirement. Participants who are age 50 or older can contribute an extra $7,500, for a total of $31,000. A provision from the SECURE 2.0 Act allows participants aged 60 through 63 to make a higher catch-up contribution of $11,250 for the year.

These age-based catch-up provisions are available only to participants in governmental 457(b) plans. Participants in plans sponsored by non-governmental, tax-exempt organizations are not eligible for these specific catch-ups.

Special 457(b) Catch-Up Contribution

Plans offer a special 457(b) catch-up contribution for participants in the three years before their plan’s “normal retirement age.” This option allows an individual to contribute more than the standard limit to make up for years when they did not contribute the maximum amount. The plan’s documents specify the normal retirement age.

The limit for this special catch-up is the lesser of two amounts. The first is twice the standard elective deferral limit for the year, which is $47,000 for 2025. The second is the current year’s standard limit plus the total amount of underutilized contributions from previous years with the same employer.

For example, if a participant has $15,000 in underutilized contributions, their limit would be the lesser of $47,000 or $38,500 ($23,500 standard limit + $15,000). Their maximum contribution would be $38,500. A participant cannot use the age-based and special catch-up provisions in the same year and must choose the one that allows for a larger contribution.

Overall Contribution Limits and Coordination with Other Plans

While the standard elective deferral limit applies to an individual’s total contributions across 401(k) and 403(b) plans, contributions to a governmental 457(b) plan are not aggregated with them. This means an employee can contribute the maximum to both a 403(b) and a governmental 457(b) plan.

For instance, in 2025, an employee under 50 could contribute $23,500 to a 403(b) and another $23,500 to their governmental 457(b). If over 50, they could add the age-based catch-up to each plan, if allowed, for a combined total of $62,000.

A separate “annual additions” limit under Section 415(c) also applies. This is the maximum that can be contributed to an account from all sources, including employee and employer contributions. For 2025, this limit is $70,000, though age-based catch-up contributions are not included in this calculation.

Handling Excess Contributions

Contributing more than the allowable limit creates an excess deferral. This excess amount is included in your gross income for that tax year. If not corrected promptly, the amount will be taxed again upon distribution from the plan.

To correct an excess deferral, the participant must notify their plan administrator. The plan will then distribute the excess amount and any earnings back to the participant. This corrective distribution must generally occur by April 15 of the following year.

The distributed excess deferral is taxable in the year the contribution was made. Any earnings on that excess amount are taxable in the year they are distributed. Governmental 457(b) plans must distribute the excess as soon as it is discovered.