457 -> 401k/IRA

[triple7stash]

Hey Everyone,

Just looking for some reasoning and maybe math/logic behind an order of operations question.  I’m a government employee with access to both a 457 and a 401k, as well as IRAs. I have maxed out my 457 plan (traditional) and am now looking to fill up other buckets. I believe the order of operations post actually indicates filling up your IRA prior to your 457/401k. Why is that, especially if I get penalty tax free access to my 457 prior to 59 1/2?

Also, now that I’m maxed out on a 457, what would be all of the merits to each? If I contribute to a Roth IRA, then all have access to all of my contributions whenever I would like. If I contribute to a 401k, then I could start a conversion ladder 5 years prior to my 457 funds running out in retirement, correct?

Age 29 yo
Income ~73k
Invested assets ~ 70k
Pension available at 52 yo
Planned fire date at 38ish

If you need any additional information, please feel free to ask.

[seattlecyclone]

The general advice to fill up an IRA before unmatched employer plan contributions is because many employer plans offer subpar investment options with high fees. The idea is to get more of your money into a nice low-fee index fund. If your workplace plans offer those, then by all means contribute to those first. The early withdrawal advantage of the 457 is also worth jumping ahead of the IRA in line, in my opinion.

[Silrossi46]

I second the 457b as the first. Also a government employee here.   You can see some of my posts as well where I talk about it.  Essentially since I am 50 I contribute 26,000 to my 457 and then the remaining goes to my after tax vanguard account where I also hold my roth that I max as well.  The fees are a little higher in my 457b but I plan to roll all but 50,000 to a rollover ira in vanguard when I separate employment.  I realize that that then throws me into a 59.5 age scenario to tap the funds but I have a pension as well that will cover all basic living expenses.  Your situation may vary.