403b vs 457 vs IRA for rollover

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cwhite
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Joined: Thu Nov 29, 2018 9:43 pm

403b vs 457 vs IRA for rollover

Post by cwhite » Thu Nov 29, 2018 9:58 pm

I have a $100k+ 401k with a former employer that I am now being required to rollover due to a merger happening with that firm. If investment options and costs are not considered, what are the pros and cons of rolling these funds into my employer sponsored 403b vs. my employer sponsored 457 vs. a traditional IRA rollover account.

Currently, I contribute the max to 403b, 457, HSA and Roth IRA accounts.

Your advise is appreciated.

krow36
Posts: 1947
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: 403b vs 457 vs IRA for rollover

Post by krow36 » Fri Nov 30, 2018 12:38 am

cwhite wrote:
Thu Nov 29, 2018 9:58 pm
I have a $100k+ 401k with a former employer that I am now being required to rollover due to a merger happening with that firm. If investment options and costs are not considered, what are the pros and cons of rolling these funds into my employer sponsored 403b vs. my employer sponsored 457 vs. a traditional IRA rollover account.

Currently, I contribute the max to 403b, 457, HSA and Roth IRA accounts.
I would not choose to roll it into a traditional IRA because that would prevent you from using the Backdoor Roth method if you need it. Choosing between the 403b and the 457 could be based on which account had the basic lowest-cost funds you want to use. If they're equal good, it doesn't matter. The 401k money would be put into a sub-account in either the 403b or the 457 accounts. The 401k sub-account would not have the unique characteristics of the 403b or the 457 accounts.

cwhite
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Joined: Thu Nov 29, 2018 9:43 pm

Re: 403b vs 457 vs IRA for rollover

Post by cwhite » Wed Dec 05, 2018 8:18 pm

Thanks for the feedback krow36. Any other thoughts from the crowd? Thanks!

krow36
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Location: WA

Re: 403b vs 457 vs IRA for rollover

Post by krow36 » Wed Dec 05, 2018 8:40 pm

Maybe you don't expect your income to require you to use the Backdoor Roth in the near future or never? And neither your 403b and 457 are low-cost? In that case, rolling the 401k to a very low-cost traditional IRA makes sense. If your fortunes change in the future and you need to use the Backdoor Roth, you could roll the tIRA into either the 403b or 457 at that time.

sawhorse
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Re: 403b vs 457 vs IRA for rollover

Post by sawhorse » Wed Dec 05, 2018 9:17 pm

Is it a government or non government 457?

cwhite
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Re: 403b vs 457 vs IRA for rollover

Post by cwhite » Fri Dec 14, 2018 5:15 pm

government 457

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UpsetRaptor
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Re: 403b vs 457 vs IRA for rollover

Post by UpsetRaptor » Fri Dec 14, 2018 5:31 pm

If the fees are similar, the 457 may be more useful if you're planning to retire early, as penalty-free withdrawals start at retirement, as opposed to 59 and a half in the tIRA and 403b.

krow36
Posts: 1947
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: 403b vs 457 vs IRA for rollover

Post by krow36 » Fri Dec 14, 2018 9:02 pm

UpsetRaptor wrote:
Fri Dec 14, 2018 5:31 pm
If the fees are similar, the 457 may be more useful if you're planning to retire early, as penalty-free withdrawals start at retirement, as opposed to 59 and a half in the tIRA and 403b.
If a non-457 account such as a 401k or IRA is accepted into a 457 plan, it is put in a separate account and does not acquire the unique 457 early distribution rules.

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