Question

Select all that apply

IRS 457 Deferred Compensation Plans ______.

-are commonly administered by an outside entity
-are tax-deferred
-have only been established by a few governments

Answer 1

IRS 457 Deferred Compensation Plans are tax-deferred, portable retirement savings options commonly offered by many local and state governments as well as certain nonprofits, and can be administered by outside entities.

Step-by-step explanation:

IRS 457 Deferred Compensation Plans are similar to other defined contribution plans like 401(k)s and 403(b)s used by employees to save for retirement. These plans are often tax-deferred, allowing employees to invest pre-tax dollars and have their savings grow tax-free until withdrawal at retirement.

The plans are generally designed to be portable, which enables the employee to transfer their retirement benefits when changing jobs. Although these plans can be administered by outside entities, they are not exclusive to only a few governments; many local and state governments and some nonprofits offer them to employees.