 For the most part, the plan operates similarly to a 401(k) or 403(b) plan with which most people in the US are familiar.The key difference is that unlike with a 401(k) plan, it has no 10% penalty for withdrawal before the age of 55 (59 years, 6 months for IRA accounts) (although the withdrawal is subject to ordinary income taxation).These 457 plans (both governmental and nongovernmental) can also allow independent contractors to participate in the plan, where 401(k) and 403(b) plans cannot.