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Message
457 vs 403b
Posted on 8/4/18 at 8:23 pm
Posted on 8/4/18 at 8:23 pm
Is there any advantage of one over the other? Should I max out one and just ignore the other or equally fund both?
Ideally I would max out both if I can swing it.
Ideally I would max out both if I can swing it.
3
Posted on 8/4/18 at 8:54 pm to TypoKnig
The 457 is more accessible down the line.
You can take the money out with no penalty before 59.5 years old.
You can take the money out with no penalty before 59.5 years old.
Posted on 8/4/18 at 9:49 pm to makersmark1
What he said. I think the 457 is far superior to a 401k/403b.
One small caveat.
A 457 is subject to creditors if it's a nonprofit. Therefore, if you work at a nonprofit that has the 457, there is a risk (could be super small, but real) that if it goes under you can lose your 457 assets.
If your 457 is from a state government entity, then it enjoys the same protection from your organization's creditors like a 401k/403b enjoys, and is not subject to creditors.
Just a weird little twist.
One small caveat.
A 457 is subject to creditors if it's a nonprofit. Therefore, if you work at a nonprofit that has the 457, there is a risk (could be super small, but real) that if it goes under you can lose your 457 assets.
If your 457 is from a state government entity, then it enjoys the same protection from your organization's creditors like a 401k/403b enjoys, and is not subject to creditors.
Just a weird little twist.
This post was edited on 8/4/18 at 9:50 pm
Posted on 8/4/18 at 10:31 pm to TypoKnig
My decision would be based on the companies and funds that are available to invest in. I always look for participants like Fidelity and Vanguard (very low expenses) versus insurance companies. And this is supposed to be for your retirement, so the fact that you can make early withdrawals should be the last thing on your mind...
This post was edited on 8/4/18 at 10:33 pm
Posted on 8/4/18 at 10:40 pm to SurfOrYak
quote:
so the fact that you can make early withdrawals should be the last thing on your mind...
Not necessarily.
If he wants to "early" retire it would be wise to fund the 457 before the 401k to avoid the 10% penalty on withdrawal.
Also, life doesn't always work out so again, I'd rather have the funds prioritized in a manner I can access them if I absolutely have to
Lastly, the fund choices are going to be the same between them, so no advantage there.
This post was edited on 8/4/18 at 11:01 pm
Posted on 8/4/18 at 10:58 pm to TypoKnig
Thanks folks. It seemed like the main difference was when one can access their money but wanted to make sure I wasnt missing anything.
Thanks again
Thanks again
Posted on 8/5/18 at 9:24 am to SurfOrYak
I have all sorts of retirement acccounts and have never accessed them or taken loans.
BUT, if life resulted in the need for cash, I’m glad I have a 457 and a Roth which allow easier access prior to 59.5.
I agree that retirement money should be left alone. BUT things can happen that might change ones circumstances dramatically.
Not for a vacation. Or college. But for a devastating life event.
BUT, if life resulted in the need for cash, I’m glad I have a 457 and a Roth which allow easier access prior to 59.5.
I agree that retirement money should be left alone. BUT things can happen that might change ones circumstances dramatically.
Not for a vacation. Or college. But for a devastating life event.
Posted on 8/5/18 at 10:16 am to Teddy Ruxpin
Can usually take a 72(t) withdrawal to avoid the 10% penalty. The downside is it may not provide enough cash flow.
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