Author Topic: 457b Advice  (Read 497 times)

RSG89

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457b Advice
« on: July 23, 2019, 11:01:07 AM »
Hey there!

My wife has access to a 457b through her public school district here in TX. The plans are offered through a company called Redwood Financial. Basically she elects to have an amount withdrawn from each paycheck and they send it to Redwood and invest it in the funds that we have selected. They have some decent options.

Vanguard S&P 500 Index Adm.- VFIAX
Vanguard Growth Index Adm.- VIGAX
Vanguard Total Intíl Index Adm.- VTIAX
Vanguard Value Index Adm.- VVIAX
Vanguard Mid Cap Index Adm.- VIMAX
Vanguard Small Cap Index Adm.- VSMAX
Vanguard Mid Cap Growth Index Adm.- VMGMX
Vanguard Small Cap Growth Index Adm.- VSGAX
Vanguard Mid Cap Value Index Adm.- VMVAX
Vanguard Small Cap Growth Index Adm.- VSIAX

However, somewhat of a concern is the fees.

Record Keeping/Custodian - .15%, $40/yr paid quarterly
Education & Communication - .50% (eye roll)
Avg. Fund Expenses - .18% (by selecting the Vanguard funds, this will likely be cheaper)

What do you think? I know the 457b is a great investment vehicle for potential early retirees, but Are the expenses too high?

terran

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Re: 457b Advice
« Reply #1 on: July 23, 2019, 11:40:36 AM »
The additional 0.65% in fees certainly isn't ideal, but I'd still probably use it over a taxable account. Sometimes school districts allow selection from among different providers. Are there any other options? Does she have a 403(b) -- if so how does that compare? Are you maxing out all other tax advantaged accounts already?

Here are some thoughts on where you should draw the line when contemplating contributing to a tax deferred deferred account with higher fees: https://www.bogleheads.org/wiki/401(k)#Expensive_or_mediocre_choices