Any reason not to max my wife's 403b?

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Any reason not to max my wife's 403b?

Postby berg » Wed May 22, 2013 2:03 am

I feel like an idiot for not knowing this sooner, but my wife (a teacher) has the ability to contribute to a 403b through Vanguard. When she first started teaching she was talked into a presentation to buy through AXA, but the costs were insane so I had her stop. I had assumed (BAD!) that AXA was the only option. Upon investigation, we can user Vanguard. I just had her open an account for her 403b there.

Our plan is to roll over her $2k from AXA to Vanguard.

Then I'm thinking I'll max her 403b with Vanguard and treat it the same as my 401k. Am I missing anything with 403b vs. 401k?

I'd estimate our income to be between $240k and $250k this year. We are already maxing my 401k and did Backdoor Roths. By maxing her 403b, we'll be contributing between 18 and 19% of our gross to retirement (35k pre tax, 11k after tax).

Anything I'm missing about 403b's or this plan? Thanks!
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Re: Any reason not to max my wife's 403b?

Postby dickenjb » Wed May 22, 2013 7:50 am

For all intents and purposes, 403(b) plan is the same as a 401(k). If she has the option to invest directly with Vanguard in her 403(b), she is incredibly lucky. Many 403(b) plans just offer crappy high priced annuities.

Vanguard will not let her invest in Admiral shares. That is the only downside.
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Re: Any reason not to max my wife's 403b?

Postby Spirit Rider » Wed May 22, 2013 8:16 am

dickenjb wrote:For all intents and purposes, 403(b) plan is the same as a 401(k). If she has the option to invest directly with Vanguard in her 403(b), she is incredibly lucky. Many 403(b) plans just offer crappy high priced annuities.

Vanguard will not let her invest in Admiral shares. That is the only downside.
+1
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Re: Any reason not to max my wife's 403b?

Postby Five Scoop » Wed May 22, 2013 8:26 am

The OP should also check to see if his wife is able to contribute to a 457(b). My wife is a teacher and has the option of contributing to both 403(b) and 457(b)plans. The 403(b) is usually much less costly as the the 457(b) plans are typically set up by insurance companies. So, 403(b) would most likely be less expensive and worth maxing out. If you wanted to defer more income you could check to see if the 457(b) is an option but be careful to check out the expenses.
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Re: Any reason not to max my wife's 403b?

Postby berg » Wed May 22, 2013 9:28 am

Yea - I was shocked to see Vanguard on the list when I checked the site for her town. I actually found what must be an old list as well and they weren't included so they must have been added in the last few years. I'm kicking myself for not asking questions earlier, but my wife is only 27 and we didn't really have the income earlier to fully take advantage of of this anyway. A good example of making sure you fully investigate all your options!

Too bad about the admiral shares, but still seems like a great opportunity.

It does not appear she is eligible for a 457.
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