Author Topic: 457 vs 403b  (Read 2351 times)

themagicman

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457 vs 403b
« on: June 02, 2015, 06:06:15 AM »
My wife is a teacher and has the option of 457 and 403b. Is there any reason that she should choose the 403 over the 457 for early retirement? They have the same investment options so other than that they look the same but the 457 allows early withdrawals. Also is there any reason to put money in my 401k (After match) before maxing out the 457. Last, it is my understanding that she can max out both the 403b and the 457 ($18,000 each). Are all of these correct? I have never used a 457! Any tips or advice is appreciated!

forummm

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Re: 457 vs 403b
« Reply #1 on: June 02, 2015, 06:29:03 AM »
Yes, she can max both of them out. I recommend taking full advantage of both if that makes sense (higher tax bracket now than during retirement). The 457 is more flexible as you mention. But it is also easy to get money out of the 403 at any age through the Roth IRA pipeline or Substantially Equal Periodic Payments.

themagicman

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Re: 457 vs 403b
« Reply #2 on: June 02, 2015, 06:32:43 AM »
Yes, she can max both of them out. I recommend taking full advantage of both if that makes sense (higher tax bracket now than during retirement). The 457 is more flexible as you mention. But it is also easy to get money out of the 403 at any age through the Roth IRA pipeline or Substantially Equal Periodic Payments.

Thank you! The goal is to max both out not sure if it is possible yet. If I am not able to, you would recommend maxing out 457 before putting any in the 403b? Or are there some advantage to the 403b that I do not know?

rubybeth

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Re: 457 vs 403b
« Reply #3 on: June 02, 2015, 06:34:47 AM »
I'd max out the 457b before the 403 since you can access it easier. Roth pipeline is an option but 457b is even easier, so if you can only max out one right now, go with that one.

Psychstache

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Re: 457 vs 403b
« Reply #4 on: June 02, 2015, 07:20:24 AM »
My wife is a teacher and has the option of 457 and 403b. Is there any reason that she should choose the 403 over the 457 for early retirement? They have the same investment options so other than that they look the same but the 457 allows early withdrawals. Also is there any reason to put money in my 401k (After match) before maxing out the 457. Last, it is my understanding that she can max out both the 403b and the 457 ($18,000 each). Are all of these correct? I have never used a 457! Any tips or advice is appreciated!



To answer the question of which first, you should look at the investment options. As long as they are reasonably similar in their offerings and costs, I would prioritize the 457 over the 403b if you can't max both.

Manguy888

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Re: 457 vs 403b
« Reply #5 on: June 02, 2015, 10:42:49 AM »
My wife is a teacher in Massachusetts and she has access to both as well. the 457 has slightly better rules, and in her case there's just one plan with great options, whereas the 403(b)s are a cesspool of insurance salesmen and high fee products.

I'd max the 457 but if you have extra money, pick the least bad 403(b) and put additional money in there