Third, look at the investments. Just like with a 401(k), you want to see broadly-diversified, low-cost, index mutual funds in the plan. If all of the investments in the plan are expensive (more than one percent expense ratios) actively managed funds, you may not want to leave your money there for years, much less decades. The funds don’t all have to be good, but there have to be enough good ones for the account to be useable for you in your overall investing plan.

Finally, check out the fees. Despite an increasing number of lawsuits against employers for ducking their fiduciary duty to their employees, many still offer terrible retirement plans. Terrible plans have lousy investments and high fees. Ideally, the employer is paying all of the fees associated with the plan, but as long as the fees total less than one percent per year, the plan is probably still worth using.

457(b) plans can be a great addition to your retirement account quiver. However, before you start using one, you need to understand how they work.

Dr. Dahle (@WCInvestor) is a blogger, best-selling author, and podcaster. He is not a licensed financial adviser, accountant, or attorney and recommends you consult with your own advisers prior to acting on any information you read here.