Which retirement plan is designed specifically for public employees?

The correct choice, 457 plans, is specifically designed for public employees and certain non-profit organizations. These plans allow employees to save for retirement on a tax-deferred basis, similar to 401(k) plans but with features that cater to the unique needs and circumstances of public sector employees.

One key aspect of 457 plans is that they often do not have the same early withdrawal penalties as other retirement plans, which makes them particularly advantageous for public sector workers who might need access to their funds before normal retirement age. Additionally, 457 plans can allow participants to contribute during both the current and final years of employment, providing an opportunity to maximize savings before retirement.

In contrast, the other retirement plans mentioned serve different purposes. 401(k) plans are primarily for private-sector employees, while Individual Retirement Accounts (IRAs) and profit-sharing plans serve broader populations without the specific focus on public sector employees like 457 plans do.