Government and non-profit employers can set up 457 retirement plans that allow employees to contribute pre-tax earnings. The contributions can grow tax-deferred within the plan. You must pay taxes on 457 plan withdrawals at your marginal tax rate, but, unlike with other employer savings plans and individual retirement accounts, there are no penalties for removing money before age 59 1/2. The Internal Revenue Service has rules that govern a 457 plan rollover to a Roth IRA.
