Contribute to both 403(b) and 457(b)?

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sman09
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Joined: Fri Mar 23, 2018 12:02 am

Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 3:35 pm

As i mentioned in an earlier post, with little knowledge of investing and more importantly fear and suspicion of markets, i did not contribute to 401k plans last year. It was only when i wrote a sizeable check to IRS along with my tax returns this year, that it occurred to me that i should start contributing to 401k, as i remember only getting reimbursed for excess tax paid, during the times i was contributing to 401k with a former employer where it was mandatory to contribute.

Reading about investing and index funds, i actually find it interesting and want to learn more and be a part of the investing community. Still trying to recall as to how i found BH forums. Wouldn't be surprised if it was shortly after filing taxes :) in my desperation to understand investing and 401k-s.

Now getting to the question :

In our 30's and have only about $100,000 saved up in 401k so far - combined income of household is about $100,000.

employer provides both 403(b) and 457(b) investment options - should we consider contributing to both the plans and if so, to max out contribution? I see that $18,500 can be contributed to both the plans - it will be challenging, but think doable if we hold on to our budgets to be able to contribute to the max in trying to expedite the build-up of our retirement savings.

The question is:
should we do it? are there any downsides to contributing to both the plans and in particular, contributing the maximum permitted amount?

Also, both Roth and traditional routes of contribution are permitted - we are inclined more towards traditional as seeing lower taxes to some extent adds to the joy of sacrificing and contributing. Our expectation is at the time we are ready to withdraw the funds, we would have retired and be having 401k as the major source of retirement savings besides some emergency funds in the bank (and SS if it still exists then). So, hopefully tax rates should not be substantially higher than what is it now.

Here is my current 401k plan - which is a target date fund by default. It will be at least 6 months to an year, before i go out and change it to a 3/4 fund portfolio, BH style.

Freedom 2045 fund class K (Fidelity)

Expense ratio - .65%

Domestic Equity - 60%
International Equity - 30%
Bonds - 7%
Other: Short-term investments and net other assets

Aside, the target-date fund is 90% equity!! - isn't that way more aggressive considering the age in bonds recommendation?

getthatmarshmallow
Posts: 138
Joined: Mon Dec 04, 2017 9:43 am

Re: Contribute to both 403(b) and 457(b)?

Post by getthatmarshmallow » Thu Jun 14, 2018 3:49 pm

I have both through my employer. Check the rules for withdrawal that apply to both, as they're slightly different -- the 457(b) allows you penalty-free access to the contributions when you separate from your employer, and the 403(b), IIRC, doesn't have that provision. The target date funds should allow you to look at their glidepath, but they're generally very aggressive until nearer retirement, probably on the reasoning that if the person is using them, they're inclined to set-and-forget it and they may as well maximize returns.

The only reason not to max both is that's an awful lot of money, percentage-wise. You can contribute $18,500 to *each* of the plans. If you have four plans between you, that's what, 72% of your income? Would you be comfortable living on the remainder? What other goals do you have? It might be wiser to determine the percentage of your income that you want to save for retirement and contribute that to your 457(b )/IRAs, rather than thinking of maxing them out.

student
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Re: Contribute to both 403(b) and 457(b)?

Post by student » Thu Jun 14, 2018 4:22 pm

I think the most important question is whether you have a governmental or non-governmental 457b. I would not want to be involved with a non-governmental one. As for regular version or Roth version, I would probably do half and half.

DA200
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Re: Contribute to both 403(b) and 457(b)?

Post by DA200 » Thu Jun 14, 2018 4:46 pm

I max a governmental 457b and a 403b ($24,500 since I have turned 50). I don't have a Roth option.
In your situation I would try to max both if I could do it and still have enough left over to live on (assuming governmental 457). I have not read your previous posts, so I don't know your entire situation. With the 2018 standard deduction of $24K, you are already in the 12% tax bracket without any contributions to tax deferred accounts. In such a low bracket you should definitely consider the Roth option for some or all of your contributions. Tax free money is king. If you keep maxing both (tax deferred), there is a decent chance you will withdraw in a bracket higher than 12%. Of course this depends upon when you choose to retire, how fast your investments grow, and tax laws when you retire or turn 70.5.
The more you save now the faster you will reach FI!

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 5:43 pm

getthatmarshmallow wrote:
Thu Jun 14, 2018 3:49 pm
I have both through my employer. Check the rules for withdrawal that apply to both, as they're slightly different -- the 457(b) allows you penalty-free access to the contributions when you separate from your employer, and the 403(b), IIRC, doesn't have that provision. The target date funds should allow you to look at their glidepath, but they're generally very aggressive until nearer retirement, probably on the reasoning that if the person is using them, they're inclined to set-and-forget it and they may as well maximize returns.

The only reason not to max both is that's an awful lot of money, percentage-wise. You can contribute $18,500 to *each* of the plans. If you have four plans between you, that's what, 72% of your income? Would you be comfortable living on the remainder? What other goals do you have? It might be wiser to determine the percentage of your income that you want to save for retirement and contribute that to your 457(b )/IRAs, rather than thinking of maxing them out.
Thank you @getthatmarshmallow for the information - also, the way you explained the logic for why TD funds are aggressive was nice!

As regards the funds invested, it will be a maximum of $37,000 contributed (max 1 457(b) roth or traditional and max 1 403(b) roth or traditional) - it's a lot, but hope to manage with the rest - if the money stays safe and grows in the aggressive TD fund and in the portfolio that i eventually redesign and self-manage, would be happy and thankful!

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 5:46 pm

student wrote:
Thu Jun 14, 2018 4:22 pm
I think the most important question is whether you have a governmental or non-governmental 457b. I would not want to be involved with a non-governmental one. As for regular version or Roth version, I would probably do half and half.
Thank you @student for sharing that suggestion - i will think through the 50/50 option you suggest. Definitely better than being unsure of which of the two is better and being unable to decide. :happy

the 457b i have is a governmental one

retiredjg
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Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Thu Jun 14, 2018 5:53 pm

Not enough information. Do you mean you have both plans available or you and your spouse have both plans available? Or you have two available and spouse has one available?

Which plan is better in terms of fees? Do you need help with that or do you already know?

Is there likely to be a pension involved for one or both of you?

Do not choose a target fund by the date in the name. Choose it by the stock to bond ratio you are comfortable with.

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CyclingDuo
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Re: Contribute to both 403(b) and 457(b)?

Post by CyclingDuo » Thu Jun 14, 2018 6:55 pm

sman09 wrote:
Thu Jun 14, 2018 3:35 pm
As i mentioned in an earlier post, with little knowledge of investing and more importantly fear and suspicion of markets, i did not contribute to 401k plans last year. It was only when i wrote a sizeable check to IRS along with my tax returns this year, that it occurred to me that i should start contributing to 401k, as i remember only getting reimbursed for excess tax paid, during the times i was contributing to 401k with a former employer where it was mandatory to contribute.

Reading about investing and index funds, i actually find it interesting and want to learn more and be a part of the investing community. Still trying to recall as to how i found BH forums. Wouldn't be surprised if it was shortly after filing taxes :) in my desperation to understand investing and 401k-s.

Now getting to the question :

In our 30's and have only about $100,000 saved up in 401k so far - combined income of household is about $100,000.

employer provides both 403(b) and 457(b) investment options - should we consider contributing to both the plans and if so, to max out contribution? I see that $18,500 can be contributed to both the plans - it will be challenging, but think doable if we hold on to our budgets to be able to contribute to the max in trying to expedite the build-up of our retirement savings.

The question is:
should we do it? are there any downsides to contributing to both the plans and in particular, contributing the maximum permitted amount?

Also, both Roth and traditional routes of contribution are permitted - we are inclined more towards traditional as seeing lower taxes to some extent adds to the joy of sacrificing and contributing. Our expectation is at the time we are ready to withdraw the funds, we would have retired and be having 401k as the major source of retirement savings besides some emergency funds in the bank (and SS if it still exists then). So, hopefully tax rates should not be substantially higher than what is it now.

Here is my current 401k plan - which is a target date fund by default. It will be at least 6 months to an year, before i go out and change it to a 3/4 fund portfolio, BH style.

Freedom 2045 fund class K (Fidelity)

Expense ratio - .65%

Domestic Equity - 60%
International Equity - 30%
Bonds - 7%
Other: Short-term investments and net other assets

Aside, the target-date fund is 90% equity!! - isn't that way more aggressive considering the age in bonds recommendation?
The same employee at the same job cannot contribute the maximum to both a 401k and a 403b (you can to a 401k and a 457b or a 403b and a 457b), so I assume you mean there are two of you and one has the 401k, and the other has the 403b/457b plan. Is this correct? Three possible maximum contributions?

2 bits
Posts: 68
Joined: Fri Jun 27, 2014 9:42 am

Re: Contribute to both 403(b) and 457(b)?

Post by 2 bits » Thu Jun 14, 2018 9:08 pm

getthatmarshmallow wrote:
Thu Jun 14, 2018 3:49 pm
I have both through my employer. Check the rules for withdrawal that apply to both, as they're slightly different -- the 457(b) allows you penalty-free access to the contributions when you separate from your employer, and the 403(b), IIRC, doesn't have that provision.

The only reason not to max both is that's an awful lot of money, percentage-wise. You can contribute $18,500 to *each* of the plans. If you have four plans between you, that's what, 72% of your income? Would you be comfortable living on the remainder? What other goals do you have? It might be wiser to determine the percentage of your income that you want to save for retirement and contribute that to your 457(b )/IRAs, rather than thinking of maxing them out.
Case in point, we are retired, and as we are both under 59 1/2 we are withdrawing from our governmental 457’s. This will help us bridge the gap until we start to collect SS. When the 457’s are gone we can start chipping away at 403’s and taxable accounts. We never maxed any of the 457 or 403 accounts until the last year or two.
I sometimes think that I am living the life of which my immigrant ancestors dreamed.

getthatmarshmallow
Posts: 138
Joined: Mon Dec 04, 2017 9:43 am

Re: Contribute to both 403(b) and 457(b)?

Post by getthatmarshmallow » Thu Jun 14, 2018 9:41 pm

CyclingDuo raises a good question. I read you as saying you used to have a 401K, but now you don't, and instead have access to a 457(b) and a 403(b). How many accounts do we have here?

And he's right. 401(k) stacks with the 403(b)). Suppose you have a 401(k) and a 403(b). The max you personally can contribute to both in total is $18,500. Employer matches, if there are any, don't count toward that max.

The interesting thing is that the 403(b) and the 457(b) don't stack with each other, so if you have both, you can contribute the max to *both.* And that's also true if you have a 401(k) and a 457(b).

The reason I suggest figuring out what your savings rate target is first is due to the good advice I got here a few months ago. When you have a disproportionately large amount of tax-advantaged space relative to your income, "maxing it out" is sometimes not liveable advice. Our household income is a little more than yours, and spouse's 401k isn't great, so we decided that we'd max my 457(b) and two Roth IRAs, and commit portions of future raises to my 403(b). This year we're redoing the kitchen so we probably won't save any more than that. But if we did, I'd invest it in my taxable account, and re-evaluate at year's end whether I should bump up the retirement withholding more.

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 10:49 pm

retiredjg wrote:
Thu Jun 14, 2018 5:53 pm
Not enough information. Do you mean you have both plans available or you and your spouse have both plans available? Or you have two available and spouse has one available?

Which plan is better in terms of fees? Do you need help with that or do you already know?

Is there likely to be a pension involved for one or both of you?

Do not choose a target fund by the date in the name. Choose it by the stock to bond ratio you are comfortable with.
my employer being an educational institution affiliated to the state, we have access to 403(b) and 457(b) - the employer by default contributes to a 401a. i had a 401k at my former institution which is yet to be rolled over. at my new place i did not contribute to 403 (b) and 457 (b) in the desire of seeing a bigger take home paycheck, having had to mandatorily contribute at my former place of work. Besides, wanted to avoid the possibility of the hard-earned money being washed out in case of a downturn - had no understanding of the importance of being invested until very recently and i blame myself for that. I wish HR departments did a session where they explain the importance to new employees

my spouse working for a private firm has a not so good 401k plan at their place of work and does not contribute to it - something to start doing

no pension involved for either of us - retirement plans is the only fall back.

thanks for the suggestion about choosing a target-date fund based on the composition of the funds in it instead of the date - makes perfect sense!

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:05 pm

DA200 wrote:
Thu Jun 14, 2018 4:46 pm
I max a governmental 457b and a 403b ($24,500 since I have turned 50). I don't have a Roth option.
In your situation I would try to max both if I could do it and still have enough left over to live on (assuming governmental 457). I have not read your previous posts, so I don't know your entire situation. With the 2018 standard deduction of $24K, you are already in the 12% tax bracket without any contributions to tax deferred accounts. In such a low bracket you should definitely consider the Roth option for some or all of your contributions. Tax free money is king. If you keep maxing both (tax deferred), there is a decent chance you will withdraw in a bracket higher than 12%. Of course this depends upon when you choose to retire, how fast your investments grow, and tax laws when you retire or turn 70.5.
The more you save now the faster you will reach FI!
Thanks a lot for the input and for sharing details of your personal investment journey!

I agree, investing in Roth sounds appropriate for my case - i was more intent on avoiding tax having had to pay last year along with return. With the increased standard deduction, i should consider roth as well.

<<In your situation I would try to max both if I could do it and still have enough left over to live on (assuming governmental 457).

i would have nearly $0 take home if i try to contribute as much as i can from my paycheck to each of

traditonal-457b
roth-457b

traditional-403b
roth-403b

have around $110,000 in the bank (yes, in the bank :? ) which are savings from the years worked so far - we could possibly draw from it for monthly expenses while accumulating money in investment accounts. spouse has a part-time position which might help until the job is around.

the one question i have is, is it worth the risk investing so much money in my retirement plan - or should i play it safe and invest something like $18,500 total - having not even contributed $1 suddenly attempting to max out all available options sounds drastic, although i would be willing to, if that would help make up for the lost time (Esp last year when the markets soared)

Thanks again for the excellent suggestions!

sman09
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Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:15 pm

getthatmarshmallow wrote:
Thu Jun 14, 2018 3:49 pm

The only reason not to max both is that's an awful lot of money, percentage-wise. You can contribute $18,500 to *each* of the plans. If you have four plans between you, that's what, 72% of your income?
you are right - it would indeed be 72% of income.

i thought contributing to either roth/traditional 457 and 403 is the rule - looks like one could contribute to both so making for 4 quadrants.

Take home will be literally zero if we attempt to max out and add medicare, ss, etc., - perhaps not max out but do as much as we can

sman09
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Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:16 pm

CyclingDuo wrote:
Thu Jun 14, 2018 6:55 pm


The same employee at the same job cannot contribute the maximum to both a 401k and a 403b (you can to a 401k and a 457b or a 403b and a 457b), so I assume you mean there are two of you and one has the 401k, and the other has the 403b/457b plan. Is this correct? Three possible maximum contributions?
we have a 401a - to which employer contributes

employee can contribute to 403b and 457b

hope that clarifies!

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:18 pm

2 bits wrote:
Thu Jun 14, 2018 9:08 pm
getthatmarshmallow wrote:
Thu Jun 14, 2018 3:49 pm
I have both through my employer. Check the rules for withdrawal that apply to both, as they're slightly different -- the 457(b) allows you penalty-free access to the contributions when you separate from your employer, and the 403(b), IIRC, doesn't have that provision.

The only reason not to max both is that's an awful lot of money, percentage-wise. You can contribute $18,500 to *each* of the plans. If you have four plans between you, that's what, 72% of your income? Would you be comfortable living on the remainder? What other goals do you have? It might be wiser to determine the percentage of your income that you want to save for retirement and contribute that to your 457(b )/IRAs, rather than thinking of maxing them out.
Case in point, we are retired, and as we are both under 59 1/2 we are withdrawing from our governmental 457’s. This will help us bridge the gap until we start to collect SS. When the 457’s are gone we can start chipping away at 403’s and taxable accounts. We never maxed any of the 457 or 403 accounts until the last year or two.
Thank you for adding to the discussion.

so, withdrawing from 457 is allowed penalty-free?

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:25 pm

getthatmarshmallow wrote:
Thu Jun 14, 2018 9:41 pm
CyclingDuo raises a good question. I read you as saying you used to have a 401K, but now you don't, and instead have access to a 457(b) and a 403(b). How many accounts do we have here?

we (i) have a 401a - to which employer contributes (spouse works for a private employer and has not contributed to it so far - i contributed to 401k plan with my former employer)

employee can contribute to 403b and 457b

hope that clarifies!
getthatmarshmallow wrote:
Thu Jun 14, 2018 9:41 pm
And he's right. 401(k) stacks with the 403(b)). Suppose you have a 401(k) and a 403(b). The max you personally can contribute to both in total is $18,500. Employer matches, if there are any, don't count toward that max.

The interesting thing is that the 403(b) and the 457(b) don't stack with each other, so if you have both, you can contribute the max to *both.* And that's also true if you have a 401(k) and a 457(b).
thank you for bringing that to my attention! i really wish i could contribute at the max

getthatmarshmallow wrote:
Thu Jun 14, 2018 9:41 pm
The reason I suggest figuring out what your savings rate target is first is due to the good advice I got here a few months ago. When you have a disproportionately large amount of tax-advantaged space relative to your income, "maxing it out" is sometimes not liveable advice. Our household income is a little more than yours, and spouse's 401k isn't great, so we decided that we'd max my 457(b) and two Roth IRAs, and commit portions of future raises to my 403(b). This year we're redoing the kitchen so we probably won't save any more than that. But if we did, I'd invest it in my taxable account, and re-evaluate at year's end whether I should bump up the retirement withholding more.

thanks a lot again for sharing the good advice you received - i agree maxing out would make the paycheck near 0 and psychologically hard to sustain for too long seeing almost no money come in!

in the same boat as you with regard to spouse's 401k plan - also there are uncertainty with their position and such - so, did not give much thought to it

<<so we decided that we'd max my 457(b) and two Roth IRAs, and commit portions of future raises to my 403(b). But if we did, I'd invest it in my taxable account,

what is the rationale to invest in a taxable account if you do have tax-advantaged space

Thanks again for sharing what you learned from this forum - there was little chance that i would have found that discussion myself.

sman09
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Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:28 pm

sman09 wrote:
Thu Jun 14, 2018 5:46 pm
student wrote:
Thu Jun 14, 2018 4:22 pm
I think the most important question is whether you have a governmental or non-governmental 457b. I would not want to be involved with a non-governmental one. As for regular version or Roth version, I would probably do half and half.
Thank you @student for sharing that suggestion - i will think through the 50/50 option you suggest. Definitely better than being unsure of which of the two is better and being unable to decide. :happy

the 457b i have is a governmental one
thinking again, i'm not sure if it's a governmental one - is working for a state's educational institution deemed same as working for the government? i thought it is when i replied above but could be wrong.

sman09
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Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Thu Jun 14, 2018 11:56 pm

Just wanted to add this information if it would help ascertain whether the 457 is a governmental one

the funds deposited will be in the retirement plan provided by Fidelity

student
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Re: Contribute to both 403(b) and 457(b)?

Post by student » Fri Jun 15, 2018 5:21 am

sman09 wrote:
Thu Jun 14, 2018 11:28 pm
sman09 wrote:
Thu Jun 14, 2018 5:46 pm
student wrote:
Thu Jun 14, 2018 4:22 pm
I think the most important question is whether you have a governmental or non-governmental 457b. I would not want to be involved with a non-governmental one. As for regular version or Roth version, I would probably do half and half.
Thank you @student for sharing that suggestion - i will think through the 50/50 option you suggest. Definitely better than being unsure of which of the two is better and being unable to decide. :happy

the 457b i have is a governmental one
thinking again, i'm not sure if it's a governmental one - is working for a state's educational institution deemed same as working for the government? i thought it is when i replied above but could be wrong.
You should ask HR or Fidelity (which you said is the provider). My understanding is that it is governmental for state universities. You can ask them whether you can roll it over to an IRA when you leave the university. It is only doable for governmental.

2 bits
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Re: Contribute to both 403(b) and 457(b)?

Post by 2 bits » Fri Jun 15, 2018 6:31 am

sman09 wrote:
Thu Jun 14, 2018 11:18 pm
2 bits wrote:
Thu Jun 14, 2018 9:08 pm
getthatmarshmallow wrote:
Thu Jun 14, 2018 3:49 pm
I have both through my employer. Check the rules for withdrawal that apply to both, as they're slightly different -- the 457(b) allows you penalty-free access to the contributions when you separate from your employer, and the 403(b), IIRC, doesn't have that provision

Thank you for adding to the discussion.

so, withdrawing from 457 is allowed penalty-free?
Sure, withdrawing from the 457 is allowed when one has “separated from service” retire quit, change jobs to a different city county state university. There is no age restriction.
That is essentially the only difference I could find comparing 403b vs. 457. Only some of the providers offered 457 plans.
Before I figured that out we were splitting savings between 403 and taxable so as to have money available penalty free if we left our jobs before 59 1/2.
But there are also 72 t (?) SEPP available as well to access retirement accounts before typical retirement age.

The OP and others are fortunate to learn the concept of “maxing” the retirement plans earlier in their careers than us.
I sometimes think that I am living the life of which my immigrant ancestors dreamed.

retiredjg
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Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Fri Jun 15, 2018 7:21 am

sman09, since you have both 403b and 457b available, you are allowed to contribute to one or the other or both. It is your choice.

Some of these plans also allow Roth contributions - I don't think we know yet if either of your plans offers that option.

Even if you have all 4 "quadrants" available to you, you cannot contribute $18,500 four times. You can put $18,500 into 403b (traditional and Roth together) and $18,500 into 457b (traditional and Roth together).

It appears your spouse has a 401k as well. Spouse can put up to $18,500 in a 401k (assuming spouse's income is at least that much).

In addition to those plans at work, you can each contribute to an IRA traditional IRA and/or Roth - up to $5,500 a year for each of you. Again, the total for each person is $5,500 for traditional and Roth together.

Obviously, no one family on your income can fill all those accounts. You need to decide about how much you can save, and then decide which accounts to put the money into. My suggestion is that you start trying to max out 1 work plan and 1 or 2 Roth IRAs. That would be about $18,500 into tax deferred accounts and up to $11,000 into Roth IRA accounts.

You have already decided that your spouse's work plan may not be the best of the lot. When you post all your information for portfolio help (see link at the bottom of this message) we can help you verify that.

We have no information on your current 403b or 457b at this point, but can help with that too. As well as your old 401k.

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CyclingDuo
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Re: Contribute to both 403(b) and 457(b)?

Post by CyclingDuo » Fri Jun 15, 2018 7:33 am

sman09 wrote:
Thu Jun 14, 2018 11:16 pm
CyclingDuo wrote:
Thu Jun 14, 2018 6:55 pm


The same employee at the same job cannot contribute the maximum to both a 401k and a 403b (you can to a 401k and a 457b or a 403b and a 457b), so I assume you mean there are two of you and one has the 401k, and the other has the 403b/457b plan. Is this correct? Three possible maximum contributions?
we have a 401a - to which employer contributes
This is good. A 401(a) is a defined benefit/pension plan utilized by education and government. Most require a mandatory contribution amount from the employee that is set by the employer. How much of your salary goes into the 401(a), and what is the employer match? The one my wife has is a mandatory contribution from the employee that is actually going up a little bit on July 1st to 6.29% of salary, and the employer match will also go up on July 1 to 9.44% for total of 15.73%.

Anyway, important to know how much of your salary is already going into this plan before moving on to the 403b and 457b.
sman09 wrote:
Thu Jun 14, 2018 11:16 pm
employee can contribute to 403b and 457b

hope that clarifies!
Yes. The 401(a) is separate and does not alter your ability to contribute to the voluntary 403b and 457b plans - both of which you can contribute to the maximum. The difficulty for most is running out of salary to do this and still having enough take-home income to meet all of your expenses (needs, wants, variables). So one has to be careful not to over-save for retirement to the detriment of the household budget. Just because these investment vehicles are there, doesn't mean you have to max them out or use all of them.

You already have the 401(a), so figure out exactly how much goes into that each month, when you will be vested, and what the projections are for your lump sum or pension at retirement.

Typical 50/20/30 rule budgets, or FA's advice on saving 10%-15%-20% for retirement should apply when figuring out how much you need to set aside for retirement each month/year. Others have already explained the 457b plan in terms of being able to draw down without facing an early withdrawal penalty compared to the 403b. My wife has the 401(a) plan in our household, and due to our salaries and the years for raising children, saving for college funds - we only used that and her IRA as her retirement saving's vehicle to avoid the dreaded over-saving and cash flow problems that one can create by having too much of the salary deducted to cover the home expenses. My pre-tax salary deduction was going to a 403b, but not maxing it out until last year. We started to increase our salary deductions in 2016, hit the empty nest scenario last year which allowed us to move into maxing out retirement plans for 2017 and 2018. We could not have done that when we were younger, had lower salaries, and were raising children. We stuck more with the 15-20% annual retirement savings rate as the rest of our savings rate went to college funds for the children and paying off the mortgage - and living life!
:sharebeer

You also mention your significant other is not utilizing the 401k at their place of employment. Is there a match available? Even if the offerings in the plan are not great, contributing enough to get the match is well worth it as that is "free money" so to speak.

Getting back to your original post, you have to figure out your budget and how much or your household would be able to contribute and still have enough take home income to cover all of your expenses.

Your 401(a) contribution is pre-tax. The 403b and 457b would be pre-tax if you used the traditional 403b/457b instead of the Roth 403b/457b (if those are available). Keep in mind, you can only contribute a total of $18.5K into a 403b whether you use the traditional or the Roth version, or a mix of the two. You cannot put $18.5K into each. Ditto on the 457b. However, you can max out a 403b and a 457b for a total of $37K (under age 50).

If your significant other contributed to the 401k - that would also be a pre-tax deduction provided it is the traditional and not the Roth version. You could also both use the after tax Roth IRA investment vehicles at a brokerage house which opens you up to all investment products (bonds, CD's, stocks, ETF's, funds, etc...). Of course, salaried income being the limiting factor on just how much you can contribute each year and still meet your household expense needs is the key issue to figure out for you.

It's not a all or nothing proposition. There is no need to "max" out anything or all plans. More important is to have a good total of something like at least 15-20% going into tax-deferred. If your budget allows you to do more and play a little catch up now since you have not been contributing, then boost that percentage up a little higher keeping strict attention not to destroy the household budget/cash flow.

Study the prioritizing investments for your household and employer offered plans to see where best to target...

https://www.bogleheads.org/wiki/Priorit ... nvestments

getthatmarshmallow
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Re: Contribute to both 403(b) and 457(b)?

Post by getthatmarshmallow » Fri Jun 15, 2018 11:22 am

Just wanted to offer a small correction to @CyclingDuo. A 401(a) may also be a defined contribution/deferred compensation plan. That's how mine is structured, and while I can't put anything in it, I'm 100% vested and can control the investments.
sman09 wrote:
Thu Jun 14, 2018 11:25 pm
what is the rationale to invest in a taxable account if you do have tax-advantaged space
In our case, flexibility. I'm personally a set-it-and-forget-it type when it comes to money, rather than every-dollar-has-a-job, and while we're not superfrugal we just don't have a lot of recurring discretionary expenses. I am naturally inclined toward saving everything, so I had to make some decisions to allow us to enjoy life now.

We decided, with advice from here, that we need to be saving 25-30% for retirement given a late start post-schooling, and so we automatically contribute that to our tax-deferred accounts. We have an emergency fund of about 12-18 months, contribute to 529s, and I also budget monthly for "lumpy" expenses like insurance/taxes. We live on what's left, and that's more than adequate given that we have cheap hobbies, and I like the freedom of knowing that we've provided for the future while being able to get a membership to the zoo for the kids or contribute to the bake sale or new ski boots on sale for me, or new stocks in taxable if I can't think of anything else to do with it. If I tie that up in the 403b for the sake of maxing it, I enjoy life a lot less.

Charon
Posts: 21
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Re: Contribute to both 403(b) and 457(b)?

Post by Charon » Fri Jun 15, 2018 11:45 am

student wrote:
Fri Jun 15, 2018 5:21 am
sman09 wrote:
Thu Jun 14, 2018 11:28 pm
thinking again, i'm not sure if it's a governmental one - is working for a state's educational institution deemed same as working for the government? i thought it is when i replied above but could be wrong.
You should ask HR or Fidelity (which you said is the provider). My understanding is that it is governmental for state universities. You can ask them whether you can roll it over to an IRA when you leave the university. It is only doable for governmental.
It is governmental in my state (WA), but indeed check with your university and/or state retirement office.

Also note 403(b)s may allow access to the funds at 55, if you've separated from the employer. So a little earlier than typical retirement accounts, although not the flexibility of the 457.

I like the strategy of having some tax-deferred contributions and some Roth contributions.

sman09
Posts: 101
Joined: Fri Mar 23, 2018 12:02 am

Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Sun Jun 17, 2018 12:40 am

student wrote:
Fri Jun 15, 2018 5:21 am
You should ask HR or Fidelity (which you said is the provider). My understanding is that it is governmental for state universities. You can ask them whether you can roll it over to an IRA when you leave the university. It is only doable for governmental.
will do - thanks @student!

sman09
Posts: 101
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Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Sun Jun 17, 2018 12:42 am

2 bits wrote:
Fri Jun 15, 2018 6:31 am
Sure, withdrawing from the 457 is allowed when one has “separated from service” retire quit, change jobs to a different city county state university. There is no age restriction.
That is essentially the only difference I could find comparing 403b vs. 457. Only some of the providers offered 457 plans.
Before I figured that out we were splitting savings between 403 and taxable so as to have money available penalty free if we left our jobs before 59 1/2.
But there are also 72 t (?) SEPP available as well to access retirement accounts before typical retirement age.
Thank you for the input "@2 bits" and for helping me with more information about withdrawing funds from 457

Not sure what exactly these are "there are also 72 t (?) SEPP available as well to access retirement accounts before typical retirement age" - would you be able to elaborate some more?

.

sman09
Posts: 101
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Re: Contribute to both 403(b) and 457(b)?

Post by sman09 » Sun Jun 17, 2018 1:20 am

retiredjg wrote:
Fri Jun 15, 2018 7:21 am
sman09, since you have both 403b and 457b available, you are allowed to contribute to one or the other or both. It is your choice.

Some of these plans also allow Roth contributions - I don't think we know yet if either of your plans offers that option.
yes, i have a Roth option available on both 403b and 457b
retiredjg wrote:
Fri Jun 15, 2018 7:21 am
Even if you have all 4 "quadrants" available to you, you cannot contribute $18,500 four times. You can put $18,500 into 403b (traditional and Roth together) and $18,500 into 457b (traditional and Roth together).
Good to know! Thanks for the pointer - i think i misunderstood $18,500 being permitted towards each of the 4 options
retiredjg wrote:
Fri Jun 15, 2018 7:21 am
It appears your spouse has a 401k as well. Spouse can put up to $18,500 in a 401k (assuming spouse's income is at least that much).
Thank you! I think we may be able to contribute to 401k from spouse's side for about $2000 - may have to check the company's policy as regards part-time employees being eligible to contribute.

retiredjg wrote:
Fri Jun 15, 2018 7:21 am
In addition to those plans at work, you can each contribute to an IRA traditional IRA and/or Roth - up to $5,500 a year for each of you. Again, the total for each person is $5,500 for traditional and Roth together.
Good to know this - i did not have much idea about IRA and this really gives lot of useful information. Have also been hearing about backdoor Roth and looks like my old 401k could be rolled over in to one - will probably make a separate post seeking advice on it.
retiredjg wrote:
Fri Jun 15, 2018 7:21 am
Obviously, no one family on your income can fill all those accounts. You need to decide about how much you can save, and then decide which accounts to put the money into. My suggestion is that you start trying to max out 1 work plan and 1 or 2 Roth IRAs. That would be about $18,500 into tax deferred accounts and up to $11,000 into Roth IRA accounts.
That's a very good suggestion and i really appreciate you @retiredjg for the care with which you have been patiently responding to my queries and offering advice - much thanks! Given the savings we have at hand (in the bank) will think through whether we could push the $18,500 slightly above - perhaps to round off to $20,000 or $25,000 and how it affects the take home pay and go from there. Will certainly consider the IRA route as you suggest.
retiredjg wrote:
Fri Jun 15, 2018 7:21 am

You have already decided that your spouse's work plan may not be the best of the lot. When you post all your information for portfolio help (see link at the bottom of this message) we can help you verify that.
That's right - plus, as i mentioned above, we are not sure whether the company's policy permits part-time employees to participate in 401k. Also, there is a bit of uncertainty with the position being there going forward - there is a very high chance that the position may not be around going forward. In fact, that was a wake-up call and this whole information seeking is keeping that scenario in mind so as to be prepared in advance.
retiredjg wrote:
Fri Jun 15, 2018 7:21 am

We have no information on your current 403b or 457b at this point, but can help with that too. As well as your old 401k.
Thank you so much for the kind offer to help with these as well! It's been a very short span since i started posting and already feel like very much a part of this community - thanks to all the support! was just lurking the last few months since sign-up reading the threads and finally decided to seek help. Glad i did!

my 403b and 457b plans also contribute to the same funds to which the employer funded 401a plans are channeled. Right now my plan is:

Freedom 2045 fund class K (Fidelity) Expense ratio - .65%
Domestic Equity - 60%
International Equity - 30%
Bonds - 7%
Other: Short-term investments and net other assets

The employer contributes about 12% without the employee having to contribute anything. I think this was also part of the reason, why i backed off from contributing from my side, apart from not wanting to put "my money" at risk. :|

I plan on moving from the default target-date fund to a 3/4 fund portfolio (with possibly some tilt to certain segments/industry)

These are some of the funds available in my plan through fidelity with an expense ratio of 0.35 or less - if presenting the list of all the funds including those with expense ration above 0.35 would help, i can do that.

Stock (expense ratio next to fund name - gross expense in bracket, if different from net expense)

Fidelity® 500 Index Fund - Institutional 0.03%
Fidelity® Total Market Index Fund - 0.035%
Fidelity® Mid Cap Index Fund - 0.05%
Fidelity® Small Cap Index Fund - 0.05%
Vanguard Small-Cap Index Fund Admiral 0.05%
Fidelity® International Index Fund - 0.06%
Fidelity® Extended Market Index Fund - 0.07%
Fidelity® Real Estate Index Fund - 0.09%
Fidelity® Global ex U.S. Index Fund - 0.1%
Fidelity® Four-in-One Index Fund (FFNOX) - 0.11% (0.13)
Vanguard Real Estate Index Fund 0.12%
Fidelity® Emerging Markets Index Fund - 0.13%
Vanguard Wellington™ Fund 0.17%
Vanguard Windsor™ II Fund Admiral™ 0.26%
Vanguard Morgan™ Growth Fund 0.28%
Fidelity® Nasdaq® Composite Index 0.3%

Bonds
Fidelity® U.S. Bond Index Fund - 0.045%
Fidelity® Intermediate 0.06%
Fidelity® Long-Term Treasury Bond Index 0.06%
Vanguard Total Bond Market Index Fund 0.05%
Fidelity® Short-Term Treasury Bond Index 0.06%
Fidelity® Inflation-Protected Bond - 0.09%
Vanguard Long-Term Investment-Grade 0.12%
Fidelity® Conservative Income 0.35% (0.4)


In this other post: viewtopic.php?f=1&t=251587&p=3971788#p3971788, where i asked for help with structuring my 401k

i got the following recommendations:
TwstdSista wrote:
Wed Jun 13, 2018 4:39 am
The three fund portfolio with your options available would consist of:
Fidelity® Total Market Index Fund - 0.035%
Fidelity® International Index Fund - 0.06%
Vanguard Total Bond Market Index Fund 0.05%

Using only Vanguard funds, you are limited to (more expensive and not a 3 fund portfolio):
Vanguard Small-Cap Index Fund Admiral 0.05%
Vanguard Real Estate Index Fund 0.12%
Vanguard Wellington™ Fund 0.17%
Vanguard Windsor™ II Fund Admiral™ 0.26%
Vanguard Total Bond Market Index Fund 0.05%

I'm at Fidelity and don't have a problem using their index funds.
Nate79 wrote:
Wed Jun 13, 2018 9:54 am

The 3 fund Fidelity index funds (Total stock, total international, and total bond) are the lowest cost options and the best choice for a 3 fund portfolio. You have a somewhat unique 401k that you have access to some other interesting funds if you want to tilt. For example not many have a REIT fund in their 401k. Or the emerging markets fund would be another interesting tilt. The others I would look at are the 3 Vanguard active funds. I do not know much about these 3 particular funds but if you put their name in the search function you will find past threads on them and see if they are for you. Especially the Morgan fund.
ruralavalon wrote:
Wed Jun 13, 2018 11:16 am
Those are excellent funds offered in your 401k, you are fortunate.

I don't use Morningstar star ratings to select funds to use. The stars are are an indication of past performance, not future performance. An index fund most commonly will have three stars, because an index fund consistently gives the average market return.

In selecting funds strive for a combination of broad diversification (to reduce risk) and low expense ratios (to increase your net gain). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Wiki article "Three-fund portfolio". Forum discussion, "The Three-Fund Portfolio".

In my opinion, of the listed funds the funds to use in your 401k are:
Fidelity® Total Market Index Fund - 0.035%
Fidelity® Global ex U.S. Index Fund - 0.1%
Fidelity® U.S. Bond Index Fund - 0.045%

Fidelity® International Index Fund - 0.06% is not a total international stock index fund, it covers only stocks of larger companies, only in developed markets excluding Canada.

Fidelity® Global ex U.S. Index Fund - 0.1% is more diversified, and covers stocks of larger companies in both emerging and developed markets including Canada.

For a little better diversification look to see if your 401k plan offers Fidelity® Total International Index Fund Premium Class (FTIPX) ER 0.10%, which in addition has coverage for stocks of smaller companies.

Fidelity U.S. Bond Index Fund and Vanguard Total Bond Market Index Fund are near equivalents. You could use either fund. Both use a version of the very broadly diversified Bloomberg Barclays U.S. Aggregate Bond Index. The expense ratio difference of just 5 thousandth of a percent is tiny, and virtually meaningless.
Mors wrote:
Wed Jun 13, 2018 5:12 pm
What ruralavalon said. I would just like to point out that if you want to accompany the main index portfolio with an actively managed fund, the Vanguard Wellington has great potential. It is cheap, it does not invest overly risky and has great managers that outperformed the market consistently in the past. Just make sure to keep your preferred stocks/bonds allocation. The Wellington fund holds about 2/3 in domestic stocks and 1/3 in domestic bonds. If for example you want an 90/10 stocks-bonds portfolio, 60/40 us/int stocks, you can go with

30% Wellington
35% Fidelity® Total Market Index Fund
35% Fidelity® Global ex U.S. Index Fund (or Fidelity® Total International Index Fund Premium Class)

retiredjg
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Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Sun Jun 17, 2018 6:04 am

sman09 wrote:
Sun Jun 17, 2018 1:20 am
Good to know this - i did not have much idea about IRA and this really gives lot of useful information. Have also been hearing about backdoor Roth and looks like my old 401k could be rolled over in to one - will probably make a separate post seeking advice on it.
I think you have misunderstood the concept of "back door Roth". The "back door" is used by people who make too much money to contribute directly to Roth IRA. It is a loop hole that you do not need.

I think you are talking about a Roth conversion which is one step of the "back door". You would "convert" the 401k to Roth IRA by paying taxes on it at your current tax rate.

The other option is to simply roll the 401k into a traditional IRA. This would not require you to pay tax on it.

Still one more option is to roll the 401k into your current 403b or 457b. No tax would be involved with that either.


The employer contributes about 12% without the employee having to contribute anything. I think this was also part of the reason, why i backed off from contributing from my side, apart from not wanting to put "my money" at risk. :|
This is looking more and more to me like a pension plan. See if you can find out more about it.



These are some of the funds available in my plan through fidelity with an expense ratio of 0.35 or less - if presenting the list of all the funds including those with expense ration above 0.35 would help, i can do that.
These are all that is needed. When you get ready to post all your information in one place, there is no need to add to this list

In this other post: viewtopic.php?f=1&t=251587&p=3971788#p3971788, where i asked for help with structuring my 401k
The list of available funds seems to be exactly the same. Is this the old 401k from your previous job? Or is this actually the 401a?

DoTheMath
Posts: 219
Joined: Sat Jul 04, 2015 1:11 pm
Location: The Plains

Re: Contribute to both 403(b) and 457(b)?

Post by DoTheMath » Sun Jun 17, 2018 8:24 am

retiredjg wrote:
Sun Jun 17, 2018 6:04 am
The employer contributes about 12% without the employee having to contribute anything. I think this was also part of the reason, why i backed off from contributing from my side, apart from not wanting to put "my money" at risk. :|
This is looking more and more to me like a pension plan. See if you can find out more about it.
I have a defined contribution 401a plan which has a employer contribution and no employee contribution. In fact, I'm not allowed to contribute to the 401a. My contributions are elective only and go into the 403b and 457b.

sman09, my view is that you should step back and think a bit about your long-term financial goals and use those to guide your decisions. It is fantastic that you have so much retirement saving space, have both Roth and traditional options, and have good investment options. Most people around here would kill for those. You will have little to no constraints (other than income!) on how you save for retirement. So you have the ability to save lots of money, but do you have the need ? Meaning, do you need to be super-agressive in how much you save because you have a short time frame until your desired retirement date? And do you have the willingness? Meaning, do you really want to defer so much of your spending until later? Life is short after all.

I like your choice of Freedom 2045 fund. You can achieve the same by rolling your own with the other, cheaper individual funds, but there is a lot to be said for the simplicity and set-it-and-forget-it nature of a target date fund. Does your employer offers the Freedom 2045 Index fund? Sometimes they do, but it is buried in some corner of the plan. For example, you can only get it through the "Brokerage Window" or whatever they call the part of the plan where you can buy "off-menu" investments (you may not have this). The index version of the Freedom plans are nearly identical and substantially cheaper, that's why I ask.
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir

retiredjg
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Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Sun Jun 17, 2018 8:41 am

DoTheMath wrote:
Sun Jun 17, 2018 8:24 am
retiredjg wrote:
Sun Jun 17, 2018 6:04 am
The employer contributes about 12% without the employee having to contribute anything. I think this was also part of the reason, why i backed off from contributing from my side, apart from not wanting to put "my money" at risk. :|
This is looking more and more to me like a pension plan. See if you can find out more about it.
I have a defined contribution 401a plan which has a employer contribution and no employee contribution. In fact, I'm not allowed to contribute to the 401a. My contributions are elective only and go into the 403b and 457b.
I understand the words, but not the overall meaning. In your case, the 401a is a defined contribution plan, but only the employer contributes to it. What happens to this money when you retire? Can it be annitized into a pension like payout? Rolled into an IRA? Do you have a choice?
Does your employer offers the Freedom 2045 Index fund? Sometimes they do, but it is buried in some corner of the plan. For example, you can only get it through the "Brokerage Window" or whatever they call the part of the plan where you can buy "off-menu"
I'm hoping we can find this out too. A target index fund in all the accounts seems like an ideal choice.

DoTheMath
Posts: 219
Joined: Sat Jul 04, 2015 1:11 pm
Location: The Plains

Re: Contribute to both 403(b) and 457(b)?

Post by DoTheMath » Sun Jun 17, 2018 2:33 pm

retiredjg wrote:
Sun Jun 17, 2018 8:41 am
DoTheMath wrote:
Sun Jun 17, 2018 8:24 am
retiredjg wrote:
Sun Jun 17, 2018 6:04 am
The employer contributes about 12% without the employee having to contribute anything. I think this was also part of the reason, why i backed off from contributing from my side, apart from not wanting to put "my money" at risk. :|
This is looking more and more to me like a pension plan. See if you can find out more about it.
I have a defined contribution 401a plan which has a employer contribution and no employee contribution. In fact, I'm not allowed to contribute to the 401a. My contributions are elective only and go into the 403b and 457b.
I understand the words, but not the overall meaning. In your case, the 401a is a defined contribution plan, but only the employer contributes to it. What happens to this money when you retire? Can it be annitized into a pension like payout? Rolled into an IRA? Do you have a choice?
In my case, as far as I have been able to tell, it's pretty much identical to my 403b: I direct how the money is invested and have the same investment options as in my 403b. If I leave before retirement, I can leave it as is, roll it over to an IRA or to my new employer, or take it as a lump sum. When I retire I can opt to leave it in the account (subject to RMDs of course), have it turned into an annuity, take it as a lump sum*, or as periodic payments.

* Which, I think, includes a rollover to an IRA if I so choose. But to be honest I haven't bothered to confirm this since it is not actionable now in any case. Although you've piqued my curiosity, so perhaps I'll call HR on Monday.
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir

retiredjg
Posts: 32655
Joined: Thu Jan 10, 2008 12:56 pm

Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Sun Jun 17, 2018 2:40 pm

Thanks DoTheMath. It's a little like a pension that is not a pension. :D

Either way, it is a nice chunk of money being put away for our poster in a tax-deferred account. This just adds to the argument that our poster does not need to fill several other tax-deferred accounts of his/her own. Filling one of the several available should be more than enough. Roth IRA or Roth 403b/457 for the rest.

If the investment options are the same, I'd take the 457b unless there is an extra charge to use it. This gives maximum withdrawal flexibility.

Xrayman69
Posts: 6
Joined: Fri Jun 01, 2018 8:52 pm

Re: Contribute to both 403(b) and 457(b)?

Post by Xrayman69 » Sun Jun 17, 2018 2:45 pm

student wrote:
Fri Jun 15, 2018 5:21 am
sman09 wrote:
Thu Jun 14, 2018 11:28 pm
sman09 wrote:
Thu Jun 14, 2018 5:46 pm
student wrote:
Thu Jun 14, 2018 4:22 pm
I think the most important question is whether you have a governmental or non-governmental 457b. I would not want to be involved with a non-governmental one. As for regular version or Roth version, I would probably do half and half.
Thank you @student for sharing that suggestion - i will think through the 50/50 option you suggest. Definitely better than being unsure of which of the two is better and being unable to decide. :happy

the 457b i have is a governmental one
thinking again, i'm not sure if it's a governmental one - is working for a state's educational institution deemed same as working for the government? i thought it is when i replied above but could be wrong.
You should ask HR or Fidelity (which you said is the provider). My understanding is that it is governmental for state universities. You can ask them whether you can roll it over to an IRA when you leave the university. It is only doable for governmental.



I believe 457b is compensation deferment that goes into a plan option such as fidelity or Transamerica that is already in place at your employers plan. There is no “penalty” technically but when withdrawn susceptle to taxation as standard income. 457 plans permit the tax free accumulation of gains (if any) while in place. This money is technical still on the books of the company and susceptible to debtors collection if the company declares bankruptcy (thus why people are highlighting government which has low risk of bankruptcy). Generally stable companies or organizations such as private universities with large endowments or the like are just as good as there is low risk of them declaring bankruptcy and thus the 457 assets being at risk to debt collectors.

457 is a nice way to “save” money with risk and benefit ratio the same as the other plans 403b etc. still taxed as standard income when withdrawn before or after retirement, therefore always liquid if needed.

As far as your fears of the market, you are correct dependent upon your risk tolerance. There will very likely be a correction in your lifetime (decrease 10-20%) but also statistically just as likely a period of significant gains over a long period of time.

retiredjg
Posts: 32655
Joined: Thu Jan 10, 2008 12:56 pm

Re: Contribute to both 403(b) and 457(b)?

Post by retiredjg » Sun Jun 17, 2018 3:03 pm

Xrayman69 wrote:
Sun Jun 17, 2018 2:45 pm
This money is technical still on the books of the company and susceptible to debtors collection if the company declares bankruptcy (thus why people are highlighting government which has low risk of bankruptcy).
This is only true of non-governmental 457b plans. Governmental 457b plans belong to the employee.

The rules for governmental and non-governmental plans are completely different. I don't know why.

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