...for those who have them.
My university offers a 457 plan and provides a pretty decent match--they contribute 8% of my salary if I contribute 6%, which (with my 403b) allows me to defer about $40,000 in taxable income each year. I'm fully vested in the 457 after a year and can obviously collect on it without penalty as soon as I leave the job. Pretty nice. The catch is that I have to invest in a variable annuity, either through TIAA or Fidelity. The fees and index options are generally pretty good, but it's still an annuity. I'll be taxed at ordinary income rates if and when I withdraw it (whether I take a lump sum or annuitize the payments).
I guess I'm wondering how others with similar options fit these products into their planning. Do you participate in a similar plan? How will you take your distributions? To me, the matching is too good to turn down. I'll invest in 2 or 3 funds that cover domestic and international stocks and maybe add 5% bonds. But once I leave my job...then what?
Edit: Ok I did some more reading and it looks like I would likely be subject to 10% penalty if I withdraw a lump sum before age 60, though annuitized payments would not be penalized. Also, I see that a rollover may be an option. That would be perfect if I could roll it into an traditional IRA.
