Roth IRA vs. 457 Plan (LA State Employee) | TigerDroppings.com

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PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
7757 posts

Roth IRA vs. 457 Plan (LA State Employee)



I'm a Louisiana state employee. Currently I'm contributing around $3k per year to the LA Public Employees Deferred Compensation Plan in addition to my mandatory LASERS contributions. I was hoping the board could give me some advice on this plan compared to a Roth IRA. I've done some research and both plans obviously have their benefits, but I'm not going to pretend to know which plan would be better for me and why.

I'm 25, have been working for 18 months, and am just trying to build a nest egg. I have no debt and don't plan on accessing this money until retirement age unless I absolutely need it. Also, I do not know that I will remain a state employee for the duration of my professional career.

My Questions. As I begin to increase my contributions, should I open up a Roth IRA or continue to just put in to the 457 plan? Should I just drop the 457 plan and contribute to a Roth until I'm maxing it out? Any advice is appreciated.







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ATL TGR
LSU Fan
Houston
Member since Apr 2008
2878 posts

re: Roth IRA vs. 457 Plan (LA State Employee)


quote:

should I open up a Roth IRA


Yes. $450/month for the rest of your working life and you should be good to go @ retirement

quote:

Should I just drop the 457 plan


Nope. Contribute to both. No reason not to plan for your future






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GenesChin
Texas A&M Fan
The Promise Land
Member since Feb 2012
13090 posts

re: Roth IRA vs. 457 Plan (LA State Employee)


quote:

Nope. Contribute to both. No reason not to plan for your future


If you can afford to put money in both why not? Short term sacrifice for long term happiness.

My dad isnear retirement who is a top 1-2% income earner is having problems because he started saving late then had problems with how he has saved. Said that his biggest mistake was not saving early when he could have






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sstig
LSU Fan
Houston
Member since Oct 2003
1682 posts

re: Roth IRA vs. 457 Plan (LA State Employee)


If you only save $450/mo and get a 5% return, in 35 years you will have a little over $500K. Sounds like a lot but it is not. Do both!!!





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PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
7757 posts

re: Roth IRA vs. 457 Plan (LA State Employee)


quote:

Nope. Contribute to both. No reason not to plan for your future

Which one first? Is there a consensus on which is better?






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