My employer has a 403b plan that I've been maxing out for many years.
My wife just became eligible for her employer's 403b and 457b. Unfortunately we don't have enough cashflow to fully fund everything ($18,500 x 3). We can afford to contribute somewhere around $25,000 this year.
I can get the max employer match on my 403b with a relatively small contribution ($5k or so), so we could max out her 457b if we wanted to.
On the surface a 457b sounds like an ideal choice for potential ER. I _think_ it would allow us to withdraw post-ER/separation, and before 59.5 without the 10% early withdrawal penalty. Along with some Roth IRAs and taxable accounts, this should give us some flexibility in accessing our funds without jumping through a lot of hoops like 72(t). The brief description of the plan does say this, however:
If you are under age 59½, the taxable portion of your withdrawal is also subject to a 10% early withdrawal penalty, unless you qualify for an exception to this rule.
I think the "exception" clause would include retirement/separation from service. I've been trying to get my hands on the actual plan document so that I can verify this, but with no luck so far.
All our plans (including the 457b) include low-fee Vanguard and Fidelity index funds. So unless there's something onerous lurking in the 457b's plan document, it seems like a no-brainer to focus our contributions there rather than our 403b's.
Can anyone think of a "gotcha" that we might not have considered? The only thing I can think of is the potential for a 457b to simply vanish, which admittedly sounds really bad. :D But this is through a public/state university system and Fidelity; we're willing to take it on faith that the money will still be there when we're approaching ER in 10 years or so.