Please help me optimize among my 457/403b choices & life plan!

[fallstoclimb]

My teacher husband is leaving County A for County B so I am trying to figure out the most optimal approach for his retirement plan options.  The County A vendor is AXA.  County B has a list of vendors I need to choose among.

Brief financial background: We are 30, hope to "retire" at 45 and work just enough to fund our lifestyle until we begin drawing from various accounts around age 57-60.  I max my TSP and we don't yet have a Roth IRA but hope to open one in the next few years. Even though our plan does not include pulling from any retirement accounts early, I really like the flexibility of the 457. DH contributed to a 403b with County A until I discovered MMM, at which time we switched all of his contributions to a 457. 

The first question is whether we should roll over his County A accounts to County B. First, the 403b: Since we do not plan to contribute to a 403b in County B, I think I will just make the decision to rollover or not solely based on the expense ratio.  Anything else I should take into account? Our allocation is a pretty standard mix of Equity 500, Small Cap, Mid Cap, International & Bonds.  I believe the domestic stocks are all index but the international is managed.  Annoyingly I am having a hard time finding the fees on the AXA website.

For the County A 457:  Again, I'd like to know what the fees are (allocation is same as the 403b), however I am tempted to leave this where it is.  I *believe* that we can access this money now that DH has left the county (even though he is in the same state -- the retirement plans seem to be county based, while the pension is state).  Obviously I would not access it except in a dire emergency -- and its only 5K -- but given that I am the primary breadwinner it seems like a good idea to have some extra cash somewhere that could be accessed in case I could no longer work. (I'm a fed with great benefits/security myself so I'm not too worried about this, but, maximum flexibility!).  The allocation is risky (90/10) but I don't think my job security would be tied to the market -- this would really be more about medical emergencies/bankruptcy.  Thoughts on this?

County B 403b options: The vendors are VALIC, Integrated Financial Solutions/Security Benefits, Met Life, and Lincoln.  It turns out I don't understand how vendors vs plans work --- I thought AXA only carried AXA stock plans or whatever -- but I'm looking at the County provided spreadsheet and it looks like VALIC and Met Life both offer Vanguard index funds??  Is that right?? If this is right I suppose I should roll over County A 403 to County B just so I can get into these Vanguard funds ---- right?  How do I do this? 

To confuse things a little further -- MetLife seems to offer only Vanguard bonds (VBMRX).  The county supplied spreadsheet also says Vanguard 500 Index is offered but the stock ticker listed is FUSEX so I think it is Fidelity (oh HR....) but fees are still way low.  VALIC offers Vanguard mid and small index (VMISX, VSISX) and low-fee Fidelity large and international index (FUSEX, FSIIX).  I guess we can combine Vanguard and Fidelity within VALIC??  Our only bond options are PTTAX, DBMIX, and ACITX, ranging from .4 to .85.  (not even really sure if those are all bonds per se)

Also all of this info is from 2013, so who knows if its accurate still!

County B 457b options:  Fees are much higher here, high enough that I'm wondering if we should split our 403b and 457 contributions rather than go all in with the 457.  I do REALLY like the flexibility of the 457 but is it worth it?  Nationwide is the only 457 vendor, making this choice a little simpler, and the lowest fee options of our preferred allocation are:

SEI S&P 500 Index - TRQIX (.29)
Nationwide Mid Cap Market Index - GMXAX (0.71)
Nationwide Small Cap Index - GMRAX (0.74)
Nationwide International Index - GIIAX (0.75)
Nationwide Bond Index - GBIAX (0.69)

And again, all this info is from 2013....

Sorry if this post is a bit of a brain dump!  This is my weakest arena of personal finance.

To summarize:
1) Should we roll over our 403b to County A to County B? (I think yes, because Vanguard.)
2) How DO you roll over????  I don't know where to start here
3) Is it right that a vendor (e.g. VALIX) carries multiple types of funds (e.g. Vanguard, Fidelity, T Rowe Price....)?
3) Keep our 457 with County A or roll to County B?
4) Can we combine Vanguard and Fidelity index funds within a vendor? Should we go with VALIC?
5) Are the high 457 fees worth it, or should we spread contributions between 457 and 403?
6) Should I just go with the lowest fees across the board?  What to do about those weird bond options with VALIC 403b?

[seattlecyclone]

0.29% isn't all that terrible for an S&P 500 fund. Maybe put all of your County B 457 money in that fund and fill out the rest of your asset allocation in other accounts? I'm not sure I would prioritize the 403(b) over a 457(b) in your situation, given that you can withdraw penalty-free from the 457(b) at any age, and there is at least one fund with a halfway reasonable expense ratio.

[MDM]

1) Should we roll over our 403b to County A to County B? (I think yes, because Vanguard.)

First you should know (not guess) the specific options/fees.  Ask for the Summary Plan Description (SPD) from each employer, and/or get someone to show you exactly what web page shows what you want to see.

2) How DO you roll over????  I don't know where to start here

The vendor you are moving to will usually handle that for you if you call and ask.

3a) Is it right that a vendor (e.g. VALIX) carries multiple types of funds (e.g. Vanguard, Fidelity, T Rowe Price....)?

Think "administrator" instead of "vendor" and it may be more apparent why the answer is "yes".  The counties have engaged the services of another company to administer the various plans, and between the county and company they have selected fund options (and fees) the employees can choose.

3b) Keep our 457 with County A or roll to County B?
4) Can we combine Vanguard and Fidelity index funds within a vendor? Should we go with VALIC?

See #1.

5) Are the high 457 fees worth it, or should we spread contributions between 457 and 403?
6) Should I just go with the lowest fees across the board?  What to do about those weird bond options with VALIC 403b?

See #1, but even knowing the fees this is a good question.  The answers depends on, among other things, your definition of "just enough" in "work just enough to fund our lifestyle until we begin drawing from various accounts around age 57-60." 
E.g., see http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/.
See also http://forum.mrmoneymustache.com/investor-alley/help-with-401k-options-please!/ for some discussion on fee comparisons.

[KCM5]

I'd roll the 403b into an IRA with Vanguard, leave the 457 where it is and put all new money into the 500 index fund. Second the suggestion to use other accounts to balance your asset allocation.

[fallstoclimb]

Thanks for the suggestion to roll the 403b into a Vanguard IRA!  I didn't even think about that.  Income limits wouldn't come into play here because we aren't looking for tax deductions, correct?  Since it was already put away pre tax?  How do I initiate this -- would it be through Vanguard?

I dunno if I'm comfortable balancing asset allocation across all of our accounts though.  The newly-created IRA -- I assume this would be a traditional IRA? -- we wouldn't contribute additional money to, so it would remain a small portion of our portfolio.  My TSP is one of the lifecycle plans, so asset allocation is automated.  Although I guess maybe this supports the idea of contributing to both a 457 and 403b with County B....?

[MDM]

Thanks for the suggestion to roll the 403b into a Vanguard IRA!  I didn't even think about that.  Income limits wouldn't come into play here because we aren't looking for tax deductions, correct?  Since it was already put away pre tax?  How do I initiate this -- would it be through Vanguard?

Rollovers are not subject to income limits.  Vanguard can likely help - give 'em a call.  See http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-IRAs-Rollovers-and-Roth-Conversions for general discussion on the subject.

One other consideration before you put a bunch of money into a traditional IRA: this will be counterproductive if you want to fund a backdoor Roth IRA in later years.  See http://www.bogleheads.org/wiki/Backdoor_Roth_IRA for more on that.

[TomTX]

Thanks for the suggestion to roll the 403b into a Vanguard IRA!  I didn't even think about that.  Income limits wouldn't come into play here because we aren't looking for tax deductions, correct?  Since it was already put away pre tax?  How do I initiate this -- would it be through Vanguard?

Have a copy of your current statement from the 403b account you want to transfer to Vanguard into a Rollover IRA. If you already have a Vanguard account, have that information handy as well. Call Vanguard Concierge Services and let them walk you through it.

[Lski'stash]

I am in the process of switching my 403b over from AXA to Valic right now. AXA's fees are way too high, and their choices of funds are not great. Valic also lets you choose and change your funds online for no fees, and they offer multiple vanguard funds.

I just called Valic and enrolled with them over the phone. They sent me paperwork to sign (took about a week), and told me once they get that back I will get an email confirmation. Then I just call them back and have them roll over my AXA account to Valic. A bit of advice- the phone people are not financial advisors. I would advise you to have the ticker numbers of the stocks/index funds you want to enroll in right away handy. I picked the 'vanguard lifestrategy growth' to start with.

The only thing I should have left to do after that is the direct pay change with my school.

[fallstoclimb]

Thanks for the input everyone. I took this Friday off work so I can sit down and figure this all out. Currently I'm thinking we will:

- Roll the 403b to IRA
- Current 457 - will check with AXA on fees and decide
- Moving forward, will split contributions between 457 and 403 to minimize fees / maximize options
- We will also open a Roth IRA next year
- Maintain maxing my TSP

And then I'll just do my best to create a portfolio-wide asset allocation, although that worries me a little! 

Any recommendations on the allocation?  I'm thinking about 10-15% bonds (we are 30),  but then what about international, small cap, large cap?

LAST QUESTION: Is there any downside I'm not thinking of to have my husbands retirement split across 4 different accounts?

[BarkyardBQ]

Wife and I both have 457b, 403b, and IRAs. We consider each account as a whole and try to set our asset allocation by fund fees and tax options available in each account.

We are 31 holding 100% Equities at 75/25 US/International.

What is your time to FIRE? Holding bonds will reduce your growth potential and you can always buy into bonds closer to early retirement.

[fallstoclimb]

I'm not comfortable with 100% equities but am happy with 10% for now. We will likely stop contributing to retirement in about 15 years (so age 45) but won't draw on them until around age 60.