What is a 457(b) Plan?
The name “457(b)” comes from the plan’s governing section in the Internal Revenue Code. These names are often shortened to simply “457 Plans.”
457(b) plans were created in 1978 as an alternative defined contribution plan for two specific types of employers: government and tax-exempt, non-government employers (such as hospitals and charities).
There are some different rules for governmental and non-governmental 457(b) plans. The most notably difference is that public governmental 457(b)s must be funded by the employer, whereas almost all non-governmental 457(b)s are not funded by employers.
Additionally, most 457(b) plans offered through private companies limit their participation to management or other highly compensated employees.
Each 457(b) has a plan provider and plan administrator, and the investment options available to plan participants are limited to only those investments specifically offered by their plan.
Can I Invest in Gold through a 457(b)?
Although your options are somewhat limited to what your plan provider makes available to you, 457(b) plans are eligible to include:
- fixed, equity indexed and/or variable annuities
- individual stocks and bonds
- mutual funds
- exchange-traded funds (ETFs)
In summary, you cannot invest in physical gold bullion (or any other precious metal) through a 457(b) Plan. However, to keep it simple, a way around this is to invest in gold through a 457(b) by to purchasing stocks in gold mining companies, or to purchase a mutual fund that includes mining company stocks. This is referred to as buying “paper gold.” There are also gold ETFs (GLD) and mining ETFs, which provide indirect access to investing.