403(b) vs. 457(b)?

[msjd123]

DH and I are both teachers for a large public school district, and the district has just started offering a 457(b) plan in addition to or instead of the 403(b) they already offered. DH and I are both contributing to 403(b)s (the public sector equivalent of a 401(k)) but this new option has me completely confused. What's the difference? Why woud one be better than the other? Can anyone give me a basic understanding of the two options and how they differ? As might be expected, the district has offered us little information on this, except to toot their own horn that they now offer both.

[velochic]

There are a couple of differences. You cannot get a loan from a 457 like you can 403. However, you can take early distributions WITHOUT penalty from a 457 *if you no longer work at the place of employment offering the 457*, while there is a 10% penalty for 403s. The catchup provisions are a bit different, too. Otherwise, they are basically the same. Perhaps within your plan, the 403 and 457 offer different investment option as well.