457 opening a trading account?

[Baldeagle721]

I currently contribute 12% to my 457. Should I continue to try max out 457 or open a separate Vanguard account and start funding VTSAX.

[uniwelder]

Not sure what you mean..... are you contributing 12% of your paycheck or did you mean you contribute 12k as in $12,000 per year?  How many dollars does 12% equate to?

I suppose maxing out the 457 or opening a brokerage account depends on when you want to use the money.  You haven't really provided much info to go off.

edited to add---- I just read through your other posts.  It sounds like you're putting in 12% of your weekly pay, which is something like 8-12k per year at a job where you might stay for 20 years.  In your other posts, you also mentioned Roth 457, as well as investing pre-tax, so I'm confused.  Did you change and go from Roth to pre-tax?

Rather than making a new posting, it might be better to expand on the other related postings you've already got going.

[Baldeagle721]

Yes, I changed from Roth457 to PreTax457. I am contributing 12% of my weekly which comes to ~185-200 a week. I am currently not at the top pay scale. My max contributing in the preTax account is 20k a year. My question was should I open a brokerage account so after I receive my paycheck and have overbudget cash, instead of placing it in a savings account, would it be wise to place money into Vanguard VTSAX? Sorry for the confusion. 

[soccerluvof4]

yes. Once you have your emergency fund set.

[Baldeagle721]

Is it wise to first try to max out my 457 or the plan I stated previously?

[uniwelder]

You're not really giving enough information for us to help out.  It sounds like your expenses should be pretty low since you have cheap or free rent and you make a pretty good salary.  Seems like you've got about an extra 10k or so per year to figure out where to put--- either max out your 457 account or save it separately.  Figure out how much extra cash you need in hand for your big ticket items (buying house, getting married, etc) in the next few years, save for that in a separate account, then put what's left over in the 457 fund.  I have a 457b fund at work, but don't know anything about how to access the money until you've left the employer, so I'm going with the assumption that its locked away.  In your case, if you think you might be working for the city for 20 years, that a long period of time to be saving all your extra cash and not being able to use it. 

[Baldeagle721]

Yes, at the moment my expenses are low. I am saving cash to move out. My salary is pretty good right now and expenses are low. I am practically debt-free. The 457 is not accessible unless you take out a loan which I never plan on doing. I will have full access to it when I retire God willing 20 more years. I was looking into another vehicle to put my cash. I keep money in a savings account but wanted to put some money into investments. I was researching Whole life cash value since you have access and it compounds, I read some posts here and it seems to not be smart. My next option was to open a Vanguard and fund VTSAX at my own pace. When I set my 457 it is deferred comp, it automatically comes out of my check. I hope I cleared my situation up.  Thank you for your replies.

[ohio4life]

If you really don't plan to spend the money prior to retirement then I would probably keep contributing to the 457 to your personal max amount whatever that may be for you based on age and budget. My personal investing plan is to do that, at least. I currently contribute to a brokerage, only because I am able to max my 457 and Roth IRA each year. I also have Vanguard options in my 457, so it fits my investment strategy. If I had to reduce my savings plan the brokerage would no longer receive additional funds for buys each pay day. You might want to look at the flow charts that are regularly recommended for deciding what investment/retirement vehicles to fund before moving to the next.

[Baldeagle721]

Thank you! Where do you post those charts?

[uniwelder]

Ohio4life might be referring to the 'investment order' posting--- https://forum.mrmoneymustache.com/investor-alley/investment-order/

[ohio4life]

Ohio4life might be referring to the 'investment order' posting--- https://forum.mrmoneymustache.com/investor-alley/investment-order/

Yes, this is what I was referring to and loosely follow myself!