Changed employers, what to do with 457 account?

[slid180]

I work in the public sector and recently changed jobs from one county to another. I plan to continue working for approximately another 25-30 years. My first employer told me my options for my deferred comp account are

1) Withdraw the money and get taxed heavily ~22%

2) Leave the money in my account even though I am no longer an employee until I turn 70 1/2 and must withdraw the money

3) Roll the money into my new employers deferred comp program


I'm not too keen on option #1, but I'm not sure what the pros/cons are between option #2 and option #3. Can anyone offer any advice on the best course of action?

Thanks!

[Sibley]

A quick google search indicates that you may be able to roll it over into IRA or similar. Look into that. I imagine that calling Vanguard or Fidelity will be helpful. Don't assume that HR has a clue.

[MDM]

2) Leave the money in my account even though I am no longer an employee until I turn 70 1/2 and must withdraw the money

3) Roll the money into my new employers deferred comp program

Agreed that #1 is probably not a good choice.

To choose between #2 vs. #3: exactly what is the "new employers deferred comp program" - another 457, or a 401k, or a 403b, or...?

If another 457, then compare investment options and fees and leave/move the money where the options and fees are best.

If not another 457, note that "if you roll over your governmental 457 plan to a traditional IRA, 401(k), or 403(b) plan, your 457 savings becomes subject to those plans. Consequently, you'll incur the 10% early withdrawal tax if you make withdrawals before age 59 1/2...."  In that case, it's probably better to choose option #2 unless those options and fees are egregious.

[DreamFIRE]

Don't roll it into an IRA, or you will lose early penalty-free access to the money.  Make sure you keep it in a 457, whether with your current or new employer.