So in 2021, a worker planning to retire in about 20 years would select a target-date fund with a year close to 2041 in its name. With target-date funds, a worker chooses the fund whose name includes the year closest to his or her expected retirement date. More 457 plans are adding target-date mutual funds that take a lot of the investment decision-making out of workers' hands. Fees and other costs are always important when evaluating investments. Then, do your due diligence on your investment options. So the first step in benefiting from this retirement vehicle is to sign up. But 457 plans generally do not permit auto-enrollment because of state or local laws. Many 401(k) plans in the private sector automatically enroll workers. "A 457 can serve as a bridge until a participant is eligible to receive his or her pension or Social Security benefits," he adds. "Some public employees, like firefighters and police officers, retire before age 59 1/2 because they started working in their early twenties and retire 20 or 25 years later in their late forties or mid fifties," says David Tanguay, chief client services officer at ICMA-RC, a not-for-profit financial services firm that manages and administers 457 plans. Firefighters Face Unique Challenges with Deferred Comp
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