Posted: 10/13/2025 6:50:03 PM EDT
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Should I invest in our 457(b)? It is a government sponsored 457. I put a good bit in our 401(k) and it has done pretty well. I still have 13-14 years to go. I also am enrolled in the state retirement plan. In addition I have to separate Roth IRAs. I just realized the 457 was available to us. Nest question: Pre-tax or after-tax contributions? I do both for the 401(k) but is one better than the other for a 457? |
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Many 457b plans offer Roth options. And, it's in addition to a personal Roth account so you can have both for more Roth account money. If you don't need the tax reduction today, then I'd go all Roth personally. You can withdraw 457b money once you retire but also can withdraw penalty free before 59 1/2. Of course, any taxes on pre-tax money will still be due. |
"It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things."
Theodore Roosevelt
Theodore Roosevelt
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Originally Posted By REAPER2502: So is the best route to make all my contributions to the 457 after tax contributions? They provide a match equivalent to 5% of my salary. Once you're getting the matching, how much (if any) and what type of contributions to make depends on your financial situation. There is no way to know which is best for you unless you share a lot more information about your finances. |
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457b’s are commonly used for folks who get to retire early, so you able to access the funds a lot sooner than any other type of plan. So depending on what your retirement plan looks like, I would stuff as much money into the 457b as possible. It isn’t like you HAVE to pull any of that money out, but it sure is nice to have the option, vs playing rule of 55 games or waiting until you are 59 1/2 to withdraw without penalties. And doing the Roth option would have been nice when I was funding mine, but they didn’t add it until I was retiring. So I would do the 401k just enough to get the full match. Next fill the 457b as much as possible. If you still have more money to save, put more into the 401k at that point. The 401k and 457b are counted as separate accounts I believe, so filling one does not effect how much you can contribute to the other, so you can stash more retirement money away by having both. |
a loaded gun won’t set you free, so you say…
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Yes you can contribute the same max to both a 401k and a 457b. Thats a LOT of money so I doubt you can max both but if you can, early retirement is definitely in your future! Lots of 457b plans have matching funds so check into that as well. Might not be much but make sure you aren’t missing any. Most likely I would do all Roth to the 457b if I was in your shoes. I have a 457b and contribute a mix of Roth and pretax. |
"It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things."
Theodore Roosevelt
Theodore Roosevelt
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Pretty much nailed it above through multiple posts. Not everyone gets to withdraw the 457b early. It’s mostly your police and fire types with the 20-25 year retirement plans. The presumption is that you do retire early so you would be living on that money earlier as part of your retirement plan. A county highway employee may be a 457b plan without the no penalty early withdrawal. Know what your rules are now instead of being surprised. If you want Roth, and most people do or should, the earlier the better. All that growth is yours unlike the growth in a standard IRA where uncle sam is going to get his share of the growth when you take distributions. One has to be an accountant or at least do a lot of homework to lay out the best plan for you, it’s complicated and can go sideways. Having all IRA as a married person who gets widowed kind of sucks because the survivor has to pay the higher single person tax rates after the loved one passes. I should have learned more before retiring but only now that I am retired have time to read or watch the talking youtube heads. They talk about having multiple buckets instead of one for retirement….. pension, IRA, Roth, Brokerage not in an IRA (freedom to use it) and cash reserves, oh and a Health Savings Acct. Oh and social Security when you get to that point. The health savings account is a great deal tax wise…..but you have to use it for qualified health care. I didn’t do one but wish I did. Brokerage, mine isn’t funded worth a shit. Cash I only keep a few months of expenses liquid and it works but may not be smart. Roth only became available in my 457b in the last 2-3 years before I retired. I should have got my own sooner. I did fully fund it while available but it’s only 10% of my holdings after doing some well timed conversion (which has its own do not touch for five years penalties from when you move it) one if they’re smart has to sit down and play with their numbers and their tax prep and how it all works together. It makes my head swim admittedly. Having the brokerage account and drawing from that is a different taxing scheme. You can juggle what you take from where to lower your taxable income which is taxed different than certain investment income. I am no expert at all, I just know that I am probably accidentally giving uncle sam more money than I have to. |
The only hyphenated names I like are cartridge names......30-06, 30-40, 38-55 etc.
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Originally Posted By SteelonSteel: Pretty much nailed it above through multiple posts. Not everyone gets to withdraw the 457b early. It’s mostly your police and fire types with the 20-25 year retirement plans. The presumption is that you do retire early so you would be living on that money earlier as part of your retirement plan. A county highway employee may be a 457b plan without the no penalty early withdrawal. Know what your rules are now instead of being surprised. If you want Roth, and most people do or should, the earlier the better. All that growth is yours unlike the growth in a standard IRA where uncle sam is going to get his share of the growth when you take distributions. One has to be an accountant or at least do a lot of homework to lay out the best plan for you, it’s complicated and can go sideways. Having all IRA as a married person who gets widowed kind of sucks because the survivor has to pay the higher single person tax rates after the loved one passes. I should have learned more before retiring but only now that I am retired have time to read or watch the talking youtube heads. They talk about having multiple buckets instead of one for retirement….. pension, IRA, Roth, Brokerage not in an IRA (freedom to use it) and cash reserves, oh and a Health Savings Acct. Oh and social Security when you get to that point. The health savings account is a great deal tax wise…..but you have to use it for qualified health care. I didn’t do one but wish I did. Brokerage, mine isn’t funded worth a shit. Cash I only keep a few months of expenses liquid and it works but may not be smart. Roth only became available in my 457b in the last 2-3 years before I retired. I should have got my own sooner. I did fully fund it while available but it’s only 10% of my holdings after doing some well timed conversion (which has its own do not touch for five years penalties from when you move it) one if they’re smart has to sit down and play with their numbers and their tax prep and how it all works together. It makes my head swim admittedly. Having the brokerage account and drawing from that is a different taxing scheme. You can juggle what you take from where to lower your taxable income which is taxed different than certain investment income. I am no expert at all, I just know that I am probably accidentally giving uncle sam more money than I have to. Just a comment on the HSA.....if you pay for medical stuff out of pocket and grow your HSA by constant contributions and investing, keep your receipts and there is no limit on when you can pay yourself back. Once you pay yourself back for the medical expenses, you can then use that money for non medical reasons presumably after retirement. I didn't take advantage of my employer's HSA plan as soon as I should because I didn't understand the real benefits. Pisses me off to know I could have a lot more in that account than I do. It's still growing fast but I could have substantially more in the account if I had known more about HSAs. It is what it is though. Now that I do, I pay all deductibles out of pocket. My employer puts money into my HSA every month and I top it off to the max. |
"It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things."
Theodore Roosevelt
Theodore Roosevelt
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I have asked around and no one seems to know if the county matches the 457 contribution. I definitely know they contribute and amount equal to 5% of your annual pay to our 401(k) regardless if you put anything in or not. I think I will be putting 5% in my 457, 2 before tax and 3 after. I will likely go back and change it. I am putting everything in my FidelityGo as after tax. |
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Originally Posted By REAPER2502: I have asked around and no one seems to know if the county matches the 457 contribution. I definitely know they contribute and amount equal to 5% of your annual pay to our 401(k) regardless if you put anything in or not. I think I will be putting 5% in my 457, 2 before tax and 3 after. I will likely go back and change it. I am putting everything in my FidelityGo as after tax. Check the investment options in your 457. Mine were too conservative so I was missing out on growth. |
"It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things."
Theodore Roosevelt
Theodore Roosevelt