DH and I both work at public universities (different ones, but in the same state, so same access to same retirement plans). We have several retirement plan options, as follows:
401a: Required contribution of 6% of salary for this defined benefit (pension) plan. Cannot access the pension until age 62 (or, if we separate from the universities, our contributions plus a tiny amount of interest can be rolled over into a new retirement vehicle).
403b: Optional. Contributions up to 18k. Our universities provide a 100% match up to 5% of our pay. Money cannot be accessed without penalty until age 59.5.
457b: Optional. Contributions up to 18k. No match provided, but money can be accessed immediately with no penalty upon separation from the university (i.e., you can access it when you stop working, regardless of age). Able to choose own investments within the parameters of what they offer through TIAA-CREF or VALIC (we use TIAA-CREF for our 403bs, so we would likely use them for the 457 as well).
We currently contribute the required amount toward the pension, and also contribute up to the employer match with our 403bs. We have quite a bit of room to contribute more now, and we are thinking it would be wise to next start investing in the 457 plan, RATHER than upping our 403b contributions. We would have access to the same funds, the same pre-tax deductions, and with the benefit of being able to immediately access the money upon early retirement if we so wish.
We are glad to have access to so many retirement plans, but at this point cannot max out all accounts--for both of us together, that would be $72k per year (18k each for the 403b [plus match] and 457), *plus* the mandatory 6% for the pension. Hopefully one day we will get there! In the meantime, does it seem wise to prioritize the 457 over additional contributions to the 403b? I guess overall, I'm thinking it makes sense, after the 401a and contributing enough to get the maximum match for the 403b, to start investing in the 457 plan. Some day when we are able to max out both of our 457s, THEN we would start shoveling additional money into the 403bs?