A Capital Group 457(b) Plan is a retirement plan offered to employees of certain organizations. It is similar to a 401k plan but offers some unique benefits.
In this guide, we will discuss the features of a Capital Group 457(b) Plan, as well as reviews from current and former participants. We will also compare the fees and ratings of this plan to other leading retirement options.
Capital Group 457(b) Plan - Reviews, Benefits, Fees & Ratings Table of Contents
What is a Capital Group 457(b) Plan?
A Capital Group 457(b) Plan is a retirement savings plan offered by the Capital Group companies. It is available to employees of participating employers and allows them to save for retirement on a tax-deferred basis. The money in the account grows tax-deferred and can be withdrawn tax-free at retirement.
How Does a Capital Group 457(b) Plan Work?
A Capital Group 457(b) Plan works by employees contributing a portion of their salary into the plan. The employer may also make contributions on the employee's behalf. The funds in the plan grow tax-deferred until they are withdrawn at retirement.
What Are The Key Features of a Capital Group 457(b) Plan?
There are a few key features of a Capital Group 457(b) Plan that make it an attractive option for employees.
First, the plan allows employees to save on taxes. With a traditional 401(k), employees are taxed on their contributions and on any earnings when they withdraw the money in retirement. With a 457 plan, employees can avoid paying taxes on their contributions and on any earnings until they retire or leave their job.
Second, the plan offers more flexibility than a traditional 401(k). Employees can choose to withdraw their money at any time, for any reason, without paying a penalty. This makes a 457 plan an ideal way to save for retirement and also have access to funds if you need them for an unexpected expense.
Third, the plan has high contribution limits. For 2019, employees can contribute up to $19,000 per year to a 457 plan. This is higher than the 401(k) contribution limit of $18,500.
Fourth, the plan offers employer matching contributions. Many employers will match a portion of their employees' contributions, up to a certain amount. This can be an excellent way to boost your retirement savings.
Finally, the plan is portable. If you leave your job, you can roll over your 457 balance into another employer's plan or into an IRA. This gives you the flexibility to change jobs without losing your hard-earned retirement savings.
What Commissions and Management Fees Does a Capital Group 457(b) Plan Come With?
The Capital Group charges an annual management fee of 0.45% on the first $50,000 in your account, and 0.20% on any amount over that. They also charge a $30 annual maintenance fee, which is waived if you have at least $250 in your account or make a deposit of at least $100 during the year.
What Are The Advantages of a Capital Group 457(b) Plan?
The Capital Group 457(b) Plan is a retirement savings plan that offers a number of benefits to employees.
For example, the plan allows employees to save for retirement on a tax-deferred basis. This means that the money that you contribute to your 457(b) Plan will not be subject to federal income taxes until it is withdrawn. Additionally, the interest that your 457(b) Plan earns is also tax-deferred.
Another advantage of the Capital Group 457(b) Plan is that it offers portability. This means that if you leave your job, you can take your balance with you. You can either roll it over into another retirement savings plan or cash it out. However, if you cash it out, you will be subject to federal income taxes on the withdrawal.
Finally, the Capital Group 457(b) Plan provides death and disability benefits. If you die or become disabled while you are employed, your beneficiaries will receive your account balance.
What Are The Disadvantages of a Capital Group 457(b) Plan?
Capital Group 457 plans have a few disadvantages.
First, there are fees associated with the plan. These fees can range from $20 to $50 per year, depending on the size of your account.
Second, the investment options available in a Capital Group 457 plan are limited. You may only be able to invest in mutual funds offered by Capital Group.
Third, your employer may not offer a matching contribution to your 457 plan. This means that you may not be able to maximize your retirement savings potential with this type of plan.
Finally, you may be subject to early withdrawal penalties if you withdraw money from your 457 plan before age 59 ½.
What Are Some Alternatives to a Capital Group 457(b) Plan?
There are a few alternatives to a Capital Group 457(b) Plan. One option is to invest in a traditional IRA. Another option is to invest in a Roth IRA.
Finally, you could also choose to invest in a 401k plan. Each of these options has its own set of pros and cons. You will need to decide which option is best for you based on your own financial situation.
How Do You Open a Capital Group 457(b) Plan?
You can open a Capital Group 457(b) Plan by visiting the Capital Group website and completing an online application. You will need to provide some personal information, including your Social Security number, date of birth, and contact information.
Once you have completed the application, a representative from the Capital Group will contact you to discuss your options and help you set up your account.
What is The Minimum Amount Required to Open a Capital Group 457(b) Plan?
The Capital Group 457(b) Plan requires a minimum investment of $25,000. This is an increase from the previous minimum of $20,000.
What Are The Capital Group 457(b) Plan Contribution Limits?
The contribution limits for the Capital Group 457(b) Plan are pretty high. For 2019, you can contribute up to $19,000 per year. If you're over the age of 50, you can contribute an additional $6000 per year. So if you're looking to save a lot of money for retirement, this could be a great option for you.
What Are The Eligibility Requirements for a Capital Group 457(b) Plan?
To be eligible to participate in a Capital Group 457 plan, you must work for a state or local government organization, or a nonprofit organization that has elected to offer the plan. You must also be employed by the organization on a full-time basis.
Do You Pay Taxes On a Capital Group 457(b) Plan?
If you're like most people, you're probably wondering if you have to pay taxes on your Capital Group 457 plan.
The answer is yes and no. If you withdraw money from your account before age 59 ½, you will owe a ten percent penalty in addition to regular income taxes. However, if you wait until after age 59 ½ to withdraw money, you will only owe regular income taxes on the withdrawals.
Another thing to keep in mind is that you may not have to pay taxes on all of your withdrawals. If you have made contributions to your account with after-tax dollars, those contributions can be withdrawn tax-free.
When Can You Withdraw Money From a Capital Group 457(b) Plan?
You can withdraw money from a Capital Group 457(b) Plan at any time, but there may be penalties for early withdrawal. Check with your plan administrator to see if there are any restrictions on withdrawals.
How Does a Capital Group 457(b) Plan Compare to a 401K?
When it comes to retirement savings plans, there are a lot of options out there. But two of the most popular choices are the Capital Group 457(b) Plan and the 401K. So, how do they compare?
For starters, let's take a look at the contribution limits. With a Capital Group 457(b) Plan, you can contribute up to $18,000 per year (or $24,000 if you're over the age of 50). With a 401K, the contribution limit is slightly higher at $18,500 per year (or $24,500 if you're over the age of 50).
When it comes to investment options, both plans offer a wide variety of choices. However, the Capital Group 457(b) Plan does have a few more investment options than the 401K.
One of the biggest differences between these two plans is how they're taxed. With a Capital Group 457(b) Plan, your contributions are made with after-tax dollars. This means that you won't have to pay any taxes on your contributions or your earnings when you retire.
With a 401K, your contributions are made with pre-tax dollars. This means that you'll have to pay taxes on your contributions and your earnings when you retire.
What Assets Are Available With a Capital Group 457(b) Plan?
The Capital Group 457(b) Plan offers a wide variety of assets, including stocks, bonds, mutual funds, and more. You can also choose to invest in a self-directed brokerage account. With so many options available, you can easily find an investment that fits your needs and goals.
Why Do People Use a Capital Group 457(b) Plan?
People use a Capital Group 457(b) Plan for a variety of reasons. Some people use it to save for retirement, while others use it to save for their children's education. There are many benefits to using a Capital Group 457(b) Plan, including the fact that you can contribute pre-tax dollars and the money grows tax-deferred.
Does a Capital Group 457(b) Plan Accept Rollovers?
A Capital Group 457(b) Plan may accept rollovers from other eligible retirement plans, including 401(k)s, 403(b)s, and governmental 457(b)s. The plan may also accept transfers from IRAs. To complete a rollover or transfer, contact your financial advisor.
How Long Does It Take to Transfer to a Capital Group 457(b) Plan?
The process of transferring to a Capital Group 457(b) Plan can take some time, depending on the complexity of your situation. However, the Capital Group has a dedicated team of professionals who will work with you to make sure that the transfer is as smooth and efficient as possible.
How Do You Put Money Into a Capital Group 457(b) Plan?
There are two ways to put money into a Capital Group 457(b) Plan. The first way is through payroll deductions from your paycheck. The second way is by making contributions directly to the plan.
Can You Open a Capital Group 457(b) Plan For a Child?
The short answer is no. A Capital Group 457 plan is only available to employees of state and local governments and tax-exempt organizations. However, there are other investment options available for children, such as a 529 college savings plan.