Anyone use 457(b) plans for retirement savings?

[Early Bird]

DH works for a large university. They have recently announced that, in addition to 403(b) plans for retirement savings, they will begin to offer a 457(b).

It looks to me as if

* Money put into a 457(b) is tax-deferred. (You don't pay taxes on the money until you withdraw it. End result -- lower taxes in current year). Also, the earnings grow tax-free.

* You can contribute to BOTH a 403(b) and a 457(b) in the same year. Maximum annual contribution for 2004 will be $13,000 to EACH.

(Could you IMAGINE reducing your taxable income by $26k a year!?)

* There is no employer match for either plan in DH's situation. Therefore, the tax break is the major benefit.

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Anybody familiar w/ these plans? Am I interpreting the literature correctly?

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I am taking a hard look at these. We won't be able to max out both plans at this stage in our life .... maybe someday. But it looks to me as if it'll be more worthwhile than the Roth IRAs, because the money comes out of pre-tax dollars.

For example, IF we could invest $400 a month into the 457(b), our monthly taxes would be reduced by $90. So, it would be like taking $310 out of the budget, not $400.

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I'll be watching as DH brings home more 457(b) literature from work. Of course, any money we invest here is in his name only, but, he comes from a family with a 0% divorce rate; that's a good sign. (Some of his siblings have been married 25 years).

[Kimmomo3]

Look at clark howard.com I think he has something on them not sure if it is good or bad.