457b private risk/reward

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Topic Author
732002
Posts: 70
Joined: Wed Dec 16, 2009 10:56 am

457b private risk/reward

Post by 732002 »

Couple mid/late 50's about five years from retirement.
Currently maxing 403b(s) plus $4K/month in a taxable account.

We can increase taxable contributions or start 457b
instead for tax savings. tax rates 24% fed, 9% state, likely to retire
in a non income tax state.

Possible strategy to withdraw 457B first and delay SS to reduce 457b exposure?

Thanks

Edit update:
Made a phone call and this is the information they gave me on withdrawal, as I understand it.

1. Non Qualified so no roll over.
2. You have 60 days after retiring to decide how much you want per month other wise it defaults to 100% cash payment.
Last edited by 732002 on Fri Nov 23, 2018 7:39 pm, edited 1 time in total.
PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: 457b private risk/reward

Post by PFInterest »

what are the distribution options with the 457?
Topic Author
732002
Posts: 70
Joined: Wed Dec 16, 2009 10:56 am

Re: 457b private risk/reward

Post by 732002 »

PFInterest wrote: Fri Nov 23, 2018 12:56 pm what are the distribution options with the 457?
Will try and find out ASAP.
Is a rollover at retirement a option?
Thanks
Last edited by 732002 on Fri Nov 23, 2018 1:24 pm, edited 1 time in total.
Cheryl604
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Joined: Sat May 24, 2014 12:24 pm

Re: 457b private risk/reward

Post by Cheryl604 »

One benefit of a 457b - the governmental variety - is that it has less restrictions on withdrawal after you leave employment. If you take money out after you leave work and before turning 59.5, you have no 10% penalty for early withdrawal and it's just taxed as ordinary income. So yes, it could fill the gap between employment and SS.
Topic Author
732002
Posts: 70
Joined: Wed Dec 16, 2009 10:56 am

Re: 457b private risk/reward

Post by 732002 »

Cheryl604 wrote: Fri Nov 23, 2018 1:21 pm One benefit of a 457b - the governmental variety - is that it has less restrictions on withdrawal after you leave employment. If you take money out after you leave work and before turning 59.5, you have no 10% penalty for early withdrawal and it's just taxed as ordinary income. So yes, it could fill the gap between employment and SS.
This 457 is private, we are planning on staggering SS 62/70, My thought was to use 457 early and go 64/70..........thanks
Cheryl604
Posts: 135
Joined: Sat May 24, 2014 12:24 pm

Re: 457b private risk/reward

Post by Cheryl604 »

Ah, the private type has several different factors to consider - one is that it remains the property of your employer until you withdraw- so if you feel good about the stability of your employer, I think that's the main consideration. If positive, you should be able to use it to fill the gap from 62-64.
Topic Author
732002
Posts: 70
Joined: Wed Dec 16, 2009 10:56 am

Re: 457b private risk/reward

Post by 732002 »

Made a phone call and this is the information they gave me on withdrawal, as I understand it.

1. Non Qualified so no roll over.
2. You have 60 days after retiring to decide how much you want per month other wise it defaults to 100% cash payment.
User avatar
Duckie
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Re: 457b private risk/reward

Post by Duckie »

732002 wrote:Couple mid/late 50's about five years from retirement.
Currently maxing 403b(s) plus $4K/month in a taxable account.
Are you contributing to IRAs? Starting Roth IRAs would be useful.
Topic Author
732002
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Joined: Wed Dec 16, 2009 10:56 am

Re: 457b private risk/reward

Post by 732002 »

Good question, Can we both put $24.5K into 403B and $6.5K into traditional or ROTH IRA?
I didn't realize we could do that. Seems like the best solution.
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Duckie
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Re: 457b private risk/reward

Post by Duckie »

732002 wrote:Can we both put $24.5K into 403B and $6.5K into traditional or ROTH IRA?
Yes.
Topic Author
732002
Posts: 70
Joined: Wed Dec 16, 2009 10:56 am

Re: 457b private risk/reward

Post by 732002 »

Will do the IRAs next year. This seems like a much more secure solution.
We met with investment adviser from work and he suggested the 457 without
mentioning the addition IRA option. Might be working in my employers interest not ours.

Thanks
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