newbie here, 457b plan
newbie here, 457b plan
hi guys, im new here,30yrs old, searching the web last week i came across this forum, bought the book which im currently reading, my job offers a 403b and a 457b, i joined the 403b 8 years ago which i already have 70k on it, i want to take advantage of the 457b plan also but i have no idea where to contribute i was thinking doing a 70/20/10 , i took some screenshots of what they're offering, thanks
maybe
NYSDCB Equity Index Unitized Account 70% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10052
International Equity Fund - Index Portfolio 20% https://www.nysdcp.com/iApp/rsc/profile ... undId=5117
NYSDCB US Debt Index Unitized Account 10% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10069
https://ibb.co/VCH9j5F
https://ibb.co/9npy97H
https://ibb.co/CVxVLZW
https://ibb.co/KKj827m
maybe
NYSDCB Equity Index Unitized Account 70% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10052
International Equity Fund - Index Portfolio 20% https://www.nysdcp.com/iApp/rsc/profile ... undId=5117
NYSDCB US Debt Index Unitized Account 10% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10069
https://ibb.co/VCH9j5F
https://ibb.co/9npy97H
https://ibb.co/CVxVLZW
https://ibb.co/KKj827m
Last edited by enkuero on Mon May 10, 2021 10:09 pm, edited 1 time in total.
Re: newbie here, 457b plan
enkuero,
Welcome to the forum.
Those funds look excellent, and a 60:30:10 (I think there is a typo in your post, 60:20:10 would add up only to 90%, so I think you either meant 70:20:10 or 60:30:10) allocation to those three funds is a sound approach.
One thing you want to keep in mind here is that, the 457 plan funds are available for withdrawal without penalty, if you happen to leave the job, even prior to age 59.5. Whereas the 403b funds are locked up until age 59.5.
This makes it logical for making the 403b plan the repository for stocks (so they have longest to grow, you are not going to be able to withdraw from it without penalty until 30 years have passed), and the 457 plan to be the repository of bonds. International stocks can be had in either, depending on your outlook for them over the long term. If you believe international stocks would outshine US equities over the next 30 years, then I think you should hold them in the 403b plan. Else, the 457 plan.
Note also that for the 457 plan, you MUST make the contributions as Traditional (pre-tax), not Roth. If you happen to withdraw from the 457 plan after separation from employment, the earnings on the Roth 457 contributions are not qualified (prior to age 59.5). Any withdrawal from it is treated as a proportional withdrawal of contributions and earnings, and you are expected to pay ordinary income taxes on the earnings.
Until you reach the age of 59.5, when magically everything in the Roth 457 plan is qualified.
But then, the same treatment is also available for your in the Roth 403b (waiting until age 59.5).
Would you not rather keep your sanity when doing tax returns, and say "everything in 457 plan is pre-tax going in, and everything coming out is taxable", rather than having to keep track of how much contributions and how much earnings are there in your 457 plan for the next 30 years? If you must make Roth contributions, make them in the 403b plan, where you are restricted from withdrawal until age 59.5 any way.
Welcome to the forum.
Those funds look excellent, and a 60:30:10 (I think there is a typo in your post, 60:20:10 would add up only to 90%, so I think you either meant 70:20:10 or 60:30:10) allocation to those three funds is a sound approach.
One thing you want to keep in mind here is that, the 457 plan funds are available for withdrawal without penalty, if you happen to leave the job, even prior to age 59.5. Whereas the 403b funds are locked up until age 59.5.
This makes it logical for making the 403b plan the repository for stocks (so they have longest to grow, you are not going to be able to withdraw from it without penalty until 30 years have passed), and the 457 plan to be the repository of bonds. International stocks can be had in either, depending on your outlook for them over the long term. If you believe international stocks would outshine US equities over the next 30 years, then I think you should hold them in the 403b plan. Else, the 457 plan.
Note also that for the 457 plan, you MUST make the contributions as Traditional (pre-tax), not Roth. If you happen to withdraw from the 457 plan after separation from employment, the earnings on the Roth 457 contributions are not qualified (prior to age 59.5). Any withdrawal from it is treated as a proportional withdrawal of contributions and earnings, and you are expected to pay ordinary income taxes on the earnings.
Until you reach the age of 59.5, when magically everything in the Roth 457 plan is qualified.
But then, the same treatment is also available for your in the Roth 403b (waiting until age 59.5).
Would you not rather keep your sanity when doing tax returns, and say "everything in 457 plan is pre-tax going in, and everything coming out is taxable", rather than having to keep track of how much contributions and how much earnings are there in your 457 plan for the next 30 years? If you must make Roth contributions, make them in the 403b plan, where you are restricted from withdrawal until age 59.5 any way.
Re: newbie here, 457b plan
thanks, the only problem i have with my 403b is that they are changing me a lor on fees
Re: newbie here, 457b plan
I am curious; with the NY state 457 plan being such a darned excellent plan, why is 403b expensive? What are the choices in your 403b plan, and who are the authorized providers of the 403b? If you would list them out, may be I (or other forum posters) can help pick out the better ones?
Re: newbie here, 457b plan
i have Equitable (AXA), since i didn't know anything about investing at the time i joined my advisor for some reason decided to allocate the funds on his own.
MSCI EAFE 1 Year -10% Buffer
Russell 2000 1 Year -10% Buffer
Russell 2000 3 Years -20% Buffer
Russell 2000 5 Years -20% Buffer
S&P 500 1 Year -10% Buffer
S&P 500 3 Years -20% Buffer
S&P 500 5 Years -20% Buffer
Other Fixed and Variable Investment Options
1290 VT DoubleLine Dyn Alloc
1290 VT DoubleLine Opp Bond
1290 VT Equity Income
1290 VT High Yield Bond
1290 VT Small Cap Value
1290 VT SmartBeta Equity
1290 VT Socially Responsible
American Funds Insrnce Srs Bnd
EQ/2000 Managed Vol
EQ/400 Managed Vol
EQ/500 Managed Vol
EQ/AB Dyn Moderate Growth
EQ/AB Small Cap Growth
EQ/Aggressive Allocation
EQ/Aggressive Growth Strategy
EQ/All Asset Growth Allocation
EQ/American Centry Mid Cap Val
EQ/Balanced Strategy
EQ/ClearBridge Sel Eqy Man Vol
EQ/Com Stck Index
EQ/Conserv Allocation
EQ/Conserv-Plus Allocation
EQ/Conservative Growth Strtgy
EQ/Conservative Strategy
EQ/Core Bond Index
EQ/Core Plus Bond
EQ/Emerging Markets Eqty PLUS
EQ/Equity 500 Index
EQ/Fr Sm Cap Val Managed Vol
EQ/Frnkln Blncd Managed Vol
EQ/Glb Eqty Managed Vol
EQ/Global Bond PLUS
EQ/Goldman Sachs Mid Cap Value
EQ/Int Core Managed Vol
EQ/Int Val Managed Vol
EQ/International Equity Index
EQ/International Managed Vol
EQ/Invesco Comstock
EQ/Invesco Global
EQ/Invesco Global Real Estate
EQ/Invesco International Grwth
EQ/JPMorgan Val Opportunities
EQ/Large Cap Growth Index
EQ/Large Cap Value Index
EQ/Lazard Emerging Mrkts Eqty
EQ/Lg Cap Core Managed Vol
EQ/Lg Cap Grw Managed Vol
EQ/Lg Cap Val Managed Vol
EQ/MFS International Growth
EQ/MFS Intrntnl Intrinsic Val
EQ/MFS Mid Cap Focused Grwth
EQ/MFS Technology
EQ/MFS Utilities Series
EQ/Mid Cap Index
EQ/Mid Cap Val Managed Vol
EQ/Moderate Allocation
EQ/Moderate Growth Strategy
EQ/Moderate-Plus Allocation
EQ/Money Market
EQ/PIMCO Global Real Return
EQ/PIMCO Ultra Short Bond
EQ/Quality Bond PLUS
EQ/Small Company Index
EQ/T. Rowe Price Growth Stock
EQ/Wellington Energy
Fidelity VIP Equity Income
Fidelity VIP Mid Cap
Invesco Oppenhmr V.I.Mn Str Fd
Invesco V.I. Diversified Div
Invesco V.I. High Yield
Invesco V.I. Mid Cap Core Eqty
Invesco V.I. Small Cap Equity
Ivy VIP High Income
Ivy VIP Small Cap Growth
MFS Investors Trust
MFS Mass Investors Grwth Stock
Multimanager Aggressive Equity
Multimanager Core Bond
Multimanager Technology
PIMCO VIT CmmdtyRealRetrn Stgy
Target 2015 Allocation
Target 2025 Allocation
Target 2035 Allocation
Target 2045 Allocation
Target 2055 Allocation
Templeton Global Bond VIP
VanEck VIP Global Hard Assets
MSCI EAFE 1 Year -10% Buffer
Russell 2000 1 Year -10% Buffer
Russell 2000 3 Years -20% Buffer
Russell 2000 5 Years -20% Buffer
S&P 500 1 Year -10% Buffer
S&P 500 3 Years -20% Buffer
S&P 500 5 Years -20% Buffer
Other Fixed and Variable Investment Options
1290 VT DoubleLine Dyn Alloc
1290 VT DoubleLine Opp Bond
1290 VT Equity Income
1290 VT High Yield Bond
1290 VT Small Cap Value
1290 VT SmartBeta Equity
1290 VT Socially Responsible
American Funds Insrnce Srs Bnd
EQ/2000 Managed Vol
EQ/400 Managed Vol
EQ/500 Managed Vol
EQ/AB Dyn Moderate Growth
EQ/AB Small Cap Growth
EQ/Aggressive Allocation
EQ/Aggressive Growth Strategy
EQ/All Asset Growth Allocation
EQ/American Centry Mid Cap Val
EQ/Balanced Strategy
EQ/ClearBridge Sel Eqy Man Vol
EQ/Com Stck Index
EQ/Conserv Allocation
EQ/Conserv-Plus Allocation
EQ/Conservative Growth Strtgy
EQ/Conservative Strategy
EQ/Core Bond Index
EQ/Core Plus Bond
EQ/Emerging Markets Eqty PLUS
EQ/Equity 500 Index
EQ/Fr Sm Cap Val Managed Vol
EQ/Frnkln Blncd Managed Vol
EQ/Glb Eqty Managed Vol
EQ/Global Bond PLUS
EQ/Goldman Sachs Mid Cap Value
EQ/Int Core Managed Vol
EQ/Int Val Managed Vol
EQ/International Equity Index
EQ/International Managed Vol
EQ/Invesco Comstock
EQ/Invesco Global
EQ/Invesco Global Real Estate
EQ/Invesco International Grwth
EQ/JPMorgan Val Opportunities
EQ/Large Cap Growth Index
EQ/Large Cap Value Index
EQ/Lazard Emerging Mrkts Eqty
EQ/Lg Cap Core Managed Vol
EQ/Lg Cap Grw Managed Vol
EQ/Lg Cap Val Managed Vol
EQ/MFS International Growth
EQ/MFS Intrntnl Intrinsic Val
EQ/MFS Mid Cap Focused Grwth
EQ/MFS Technology
EQ/MFS Utilities Series
EQ/Mid Cap Index
EQ/Mid Cap Val Managed Vol
EQ/Moderate Allocation
EQ/Moderate Growth Strategy
EQ/Moderate-Plus Allocation
EQ/Money Market
EQ/PIMCO Global Real Return
EQ/PIMCO Ultra Short Bond
EQ/Quality Bond PLUS
EQ/Small Company Index
EQ/T. Rowe Price Growth Stock
EQ/Wellington Energy
Fidelity VIP Equity Income
Fidelity VIP Mid Cap
Invesco Oppenhmr V.I.Mn Str Fd
Invesco V.I. Diversified Div
Invesco V.I. High Yield
Invesco V.I. Mid Cap Core Eqty
Invesco V.I. Small Cap Equity
Ivy VIP High Income
Ivy VIP Small Cap Growth
MFS Investors Trust
MFS Mass Investors Grwth Stock
Multimanager Aggressive Equity
Multimanager Core Bond
Multimanager Technology
PIMCO VIT CmmdtyRealRetrn Stgy
Target 2015 Allocation
Target 2025 Allocation
Target 2035 Allocation
Target 2045 Allocation
Target 2055 Allocation
Templeton Global Bond VIP
VanEck VIP Global Hard Assets
Re: newbie here, 457b plan
The format is hard to read. But is EQ the only 403b provider? If you are a school teacher, generally there would be more than one 403b authorized providers in the school district.
Can you tell us how much you are paying for the advisor? If I know anything about Equitable AXA, they soak you with a 1% advisor fees minimum. You can do much better on your own. Your existing portfolio also looks like a jumble, which can be vastly simplified. I would say, in the absence of anything else, and assuming AXA is the only authorized provider, into the EQ/S&P 500 Index fund. That fund usually has a 0.58% expense ratio (my wife is a school teacher and victim of AXA too). While not great, it's the cheapest fund available, and given that you also have the 457 plan to cover you, and you are looking at 30+ years before you would withdraw ... just drop everything into this one fund and call it a day.
Can you tell us how much you are paying for the advisor? If I know anything about Equitable AXA, they soak you with a 1% advisor fees minimum. You can do much better on your own. Your existing portfolio also looks like a jumble, which can be vastly simplified. I would say, in the absence of anything else, and assuming AXA is the only authorized provider, into the EQ/S&P 500 Index fund. That fund usually has a 0.58% expense ratio (my wife is a school teacher and victim of AXA too). While not great, it's the cheapest fund available, and given that you also have the 457 plan to cover you, and you are looking at 30+ years before you would withdraw ... just drop everything into this one fund and call it a day.
- ruralavalon
- Posts: 26351
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: newbie here, 457b plan
Welcome to the forum .
Is this a governmental 457b plan? If so I suggest making the maximum annual employee contribution of $19.5k if that is practical for you. That should be a,priority over contributions to the AXA 403b.
In your employer's 403b take a look at the funds offered by other providers instead of AXA. Two providers that may be better are Voya and Aspire Financial Services.
Your employer's 457b plan offers good funds, you are fortunate. Those are three excellent funds with very low expense ratios. Those are good fund to use, and your proposed asset allocation is reasonable.enkuero wrote: ↑Fri May 07, 2021 9:46 pm hi guys, im new here,30yrs old, searching the web last week i came across this forum, bought the book which im currently reading, my job offers a 403b and a 457b, i joined the 403b 8 years ago which i already have 70k on it, i want to take advantage of the 457b plan also but i have no idea where to contribute i was thinking doing a 60/20/10 , i took some screenshots of what they're offering, thanks
maybe
NYSDCB Equity Index Unitized Account 60% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10052
International Equity Fund - Index Portfolio 20% https://www.nysdcp.com/iApp/rsc/profile ... undId=5117
NYSDCB US Debt Index Unitized Account 10% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10069
https://ibb.co/VCH9j5F
https://ibb.co/9npy97H
https://ibb.co/CVxVLZW
https://ibb.co/KKj827m
Is this a governmental 457b plan? If so I suggest making the maximum annual employee contribution of $19.5k if that is practical for you. That should be a,priority over contributions to the AXA 403b.
In your employer's 403b take a look at the funds offered by other providers instead of AXA. Two providers that may be better are Voya and Aspire Financial Services.
Last edited by ruralavalon on Sat May 08, 2021 12:17 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: newbie here, 457b plan
what are your thoughts, im contributing 900/moths towards my 403b, i just opened the 457 account since i didnt know the school offered it, they dond advertise it either. shoul i make the 900 contributions to my new 457b plan and lower the 403b to $100/moths ?
- ruralavalon
- Posts: 26351
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: newbie here, 457b plan
In your employer's 403b take a look at the funds offered by other providers instead of AXA. Two providers that may be better are Voya and Aspire Financial Services.enkuero wrote: ↑Sat May 08, 2021 12:15 pm what are your thoughts, im contributing 900/moths towards my 403b, i just opened the 457 account since i didnt know the school offered it, they dond advertise it either. shoul i make the 900 contributions to my new 457b plan and lower the 403b to $100/moths ?
The governmental 457b you listed first is better than the AXA 403b plan.
Last edited by ruralavalon on Sat May 08, 2021 12:21 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: newbie here, 457b plan
yes governmental 457b, unfortunately i cant max it out, the most i can contribute is 11k/years, i just posted a screenshot of the others providers,im really regrettingruralavalon wrote: ↑Sat May 08, 2021 12:13 pm Welcome to the forum .
Your employer's 457b plan offers good funds, you are fortunate. Those are three excellent funds with very low expense ratios. Those are good fund to use, and your proposed asset allocation is reasonable.enkuero wrote: ↑Fri May 07, 2021 9:46 pm hi guys, im new here,30yrs old, searching the web last week i came across this forum, bought the book which im currently reading, my job offers a 403b and a 457b, i joined the 403b 8 years ago which i already have 70k on it, i want to take advantage of the 457b plan also but i have no idea where to contribute i was thinking doing a 60/20/10 , i took some screenshots of what they're offering, thanks
maybe
NYSDCB Equity Index Unitized Account 60% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10052
International Equity Fund - Index Portfolio 20% https://www.nysdcp.com/iApp/rsc/profile ... undId=5117
NYSDCB US Debt Index Unitized Account 10% https://www.nysdcp.com/iApp/rsc/profile ... ndId=10069
https://ibb.co/VCH9j5F
https://ibb.co/9npy97H
https://ibb.co/CVxVLZW
https://ibb.co/KKj827m
Is this a governmental 457b plan? If so I suggest making the maximum annual employee contribution of $19.5k if that is practical for you. That should be a,priority over contributions to the AXA 403b.
In your employer's 403b are there any plan providers available other than AXA?
myself, 9 years with my 403b not knoeing that i have a 457b plans, i. just glad i came across the book and started digging about my finances, i guess im not too late since im just 33 years old, thanks
Re: newbie here, 457b plan
The Legend Group, which is a rebranded name for the Lincoln Investment Company, is a reseller of Vanguard funds. I would go with them over any other providers in your list.
Additionally, I would prioritize maximizing the 457 plan up to $19.5k first and $6k Roth IRA next. Only if money left over and you can swing it, resume contributions to the 403b.
Additionally, I would prioritize maximizing the 457 plan up to $19.5k first and $6k Roth IRA next. Only if money left over and you can swing it, resume contributions to the 403b.
Re: newbie here, 457b plan
thanks, ill look into it, not sure if i have to pay a fee to transfer itlakpr wrote: ↑Sat May 08, 2021 12:24 pm The Legend Group, which is a rebranded name for the Lincoln Investment Company, is a reseller of Vanguard funds. I would go with them over any other providers in your list.
Additionally, I would prioritize maximizing the 457 plan up to $19.5k first and $6k Roth IRA next. Only if money left over and you can swing it, resume contributions to the 403b.
Re: newbie here, 457b plan
It sounds like your best approach is to discontinue contributions to the 403b, and transfer the balance to the least expensive provider. It will take some work to determine the least expensive 403b provider. Then you’ll want to transfer the 403b via direct trustee to trustee transfer. I can’t speak to any transfer fees, but if there are fees it’s likely that the benefit of the lower expenses will mitigate those. You might want to check out the Facebook 403bwise forum as you navigate this process. What you can’t do is transfer the 403b into the 457.enkuero wrote: ↑Sat May 08, 2021 1:52 pmthanks, ill look into it, not sure if i have to pay a fee to transfer itlakpr wrote: ↑Sat May 08, 2021 12:24 pm The Legend Group, which is a rebranded name for the Lincoln Investment Company, is a reseller of Vanguard funds. I would go with them over any other providers in your list.
Additionally, I would prioritize maximizing the 457 plan up to $19.5k first and $6k Roth IRA next. Only if money left over and you can swing it, resume contributions to the 403b.
As others have advised, you’ll want to set up the 457 and direct all future contributions there. Once you broach the $19,500 annual contribution limit there, you can direct additional contributions to a Roth IRA in a brokerage separate from your employer.
Forum members can help you choose your funds in those accounts moving forward.
- ruralavalon
- Posts: 26351
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: newbie here, 457b plan
For the Roth IRA, when you get to that point, I suggest a low cost fund firm such as Vanguard, Fidelity or Schwab.Sahara wrote: ↑Sat May 08, 2021 2:31 pmIt sounds like your best approach is to discontinue contributions to the 403b, and transfer the balance to the least expensive provider. It will take some work to determine the least expensive 403b provider. Then you’ll want to transfer the 403b via direct trustee to trustee transfer. I can’t speak to any transfer fees, but if there are fees it’s likely that the benefit of the lower expenses will mitigate those. You might want to check out the Facebook 403bwise forum as you navigate this process. What you can’t do is transfer the 403b into the 457.enkuero wrote: ↑Sat May 08, 2021 1:52 pmthanks, ill look into it, not sure if i have to pay a fee to transfer itlakpr wrote: ↑Sat May 08, 2021 12:24 pm The Legend Group, which is a rebranded name for the Lincoln Investment Company, is a reseller of Vanguard funds. I would go with them over any other providers in your list.
Additionally, I would prioritize maximizing the 457 plan up to $19.5k first and $6k Roth IRA next. Only if money left over and you can swing it, resume contributions to the 403b.
As others have advised, you’ll want to set up the 457 and direct all future contributions there. Once you broach the $19,500 annual contribution limit there, you can direct additional contributions to a Roth IRA in a brokerage separate from your employer.
Forum members can help you choose your funds in those accounts moving forward.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: newbie here, 457b plan
Aspire is on your list and they are considered by 403bwise.org to be a top tier vendor. I think that is your best choice.
https://403bwise.org/education/vendor-search-tool
https://403bwise.org/education/bad-403b
Re: newbie here, 457b plan
I believe there's an advisor option in addition to a self-directed option with Aspire. emkuero, you'll want to make sure that you have a self-directed mutual fund plan - whichever provider you choose. Avoid any annuity and/or advisor platform. If you do a search here for Aspire 403b you will see how others have navigated this terrain.earflop wrote: ↑Sat May 08, 2021 4:06 pmAspire is on your list and they are considered by 403bwise.org to be a top tier vendor. I think that is your best choice.
https://403bwise.org/education/vendor-search-tool
https://403bwise.org/education/bad-403b
Re: newbie here, 457b plan
wow, thanks a lot, im glad i came here, book also is helping out, just amazing the amount of funds aspire offers, compare to AXA, i cant believe i waited 9 years to do some research in to it. im going to call the advisor so i can start the process of transferring to Aspire. i was waiting for the weekend now i can't wait for monday
Re: newbie here, 457b plan
You’re in a good position and far ahead of where you would have been had you not utilized the expensive 403b. I’d give myself a pat on the back for taking the initiative at this point, continue educating myself and look forward instead of back.enkuero wrote: ↑Sat May 08, 2021 5:22 pm wow, thanks a lot, im glad i came here, book also is helping out, just amazing the amount of funds aspire offers, compare to AXA, i cant believe i waited 9 years to do some research in to it. im going to call the advisor so i can start the process of transferring to Aspire. i was waiting for the weekend now i can't wait for monday
Just a few other pieces you may want to consider:
As a school district employee you may have pension and health insurance benefits that you’ll want to explore as you map out your retirement plan and make long term investment decisions.
Finally, some unions offer a very reasonably priced legal package. NYSUT has a package which costs $85 for current employees and $55 for retirees and includes a simple will, living will and power of attorney.
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- Joined: Tue Oct 02, 2018 6:10 pm
- Location: NYC
Re: newbie here, 457b plan
Enkuero
Everything depends on your saving rate and tax bracket, martial status and whether or not children will be in the picture.
I am single 60 and was in NYSDCP for 31 years my portfolio majority is in pretax 457.
My 457 portfolio is 1.68 million as of Friday close, my salary was 30k to 97k.
Since you started and have a pension you may be better off with a 50/50 balance of Pretax 457 aka traditional and aftertax aka Roth 457.
With pension and over-saving you could be in a higher tax bracket retired.
Of course everything could change by the time you retire.
With pretax 457 you could retire early without early withdrawal penalty of 10% before 59.5.
Monitor your balance annually until you get to 500k, once you get to 1 million you could adjust to more Roth.
With both 403b and 457 you could leave your job earlier, of course it depends on your pension tier.
Re: newbie here, 457b plan
im tier 4, vestedretire2022 wrote: ↑Sun May 09, 2021 11:44 amEnkuero
Everything depends on your saving rate and tax bracket, martial status and whether or not children will be in the picture.
I am single 60 and was in NYSDCP for 31 years my portfolio majority is in pretax 457.
My 457 portfolio is 1.68 million as of Friday close, my salary was 30k to 97k.
Since you started and have a pension you may be better off with a 50/50 balance of Pretax 457 aka traditional and aftertax aka Roth 457.
With pension and over-saving you could be in a higher tax bracket retired.
Of course everything could change by the time you retire.
With pretax 457 you could retire early without early withdrawal penalty of 10% before 59.5.
Monitor your balance annually until you get to 500k, once you get to 1 million you could adjust to more Roth.
With both 403b and 457 you could leave your job earlier, of course it depends on your pension tier.
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- Joined: Tue Oct 02, 2018 6:10 pm
- Location: NYC
Re: newbie here, 457b plan
Very good I am Tier 4 as well, if are you ERS, and I am a civil servant, and it is 55 and 30 years.
As Sahara suggested you should look into with HR, what happens when you retire early before 65 Medicare.
NYSHIP becomes primary before Medicare.
Here is our plan, which you may have a different plan:
https://www.cs.ny.gov/employee-benefits ... p-2019.pdf
Re: newbie here, 457b plan
after arguing with the adviser he finally sent me the exp ratios, very high tho' . i don't understand why the school district allowed this company to rip people off, they don't even advertise the 547b plan. very sad, here a list of the funds .
Re: newbie here, 457b plan
Good work! It also appears that this is not a straight mutual fund 403b. If it is an annuity product there are likely additional M&E expenses as well.
Did you ask the advisor about surrender fees? These are often based upon annual contributions. For example 9% of your 2020 contributions sliding back 7 or so years to 3% of your 2013 contributions. Some people choose to leave the account intact holding the least expensive fund until the surrender fees expire. Others prefer to rip off the band-aid. You'll want to push the advisor for clarity regarding what your costs will be upon transfer.
Mostly you want to direct all future contributions to the 457.
The school districts are often quite ignorant regarding their 403b offerings. That's another conversation.
Did you ask the advisor about surrender fees? These are often based upon annual contributions. For example 9% of your 2020 contributions sliding back 7 or so years to 3% of your 2013 contributions. Some people choose to leave the account intact holding the least expensive fund until the surrender fees expire. Others prefer to rip off the band-aid. You'll want to push the advisor for clarity regarding what your costs will be upon transfer.
Mostly you want to direct all future contributions to the 457.
The school districts are often quite ignorant regarding their 403b offerings. That's another conversation.
Re: newbie here, 457b plan
That's an ugly list although it is typical of 403b plans in the past. If you stay with this vendor,I suggest that you move everything to the 500 index and possibly the guaranteed interest fund depending on what it is paying. Do not worry about the expense ratio of the guaranteed interest fund - what it pays is after expenses.
Stop making contributions here and start with the 457, building the rest of the portfolio around what you have here.
Better yet...if you can...move this money and future contributions to another vendor with lower costs.
Stop making contributions here and start with the 457, building the rest of the portfolio around what you have here.
Better yet...if you can...move this money and future contributions to another vendor with lower costs.
Link to Asking Portfolio Questions
Re: newbie here, 457b plan
Sahara wrote: ↑Mon May 10, 2021 11:58 am Good work! It also appears that this is not a straight mutual fund 403b. If it is an annuity product there are likely additional M&E expenses as well.
Did you ask the advisor about surrender fees? These are often based upon annual contributions. For example 9% of your 2020 contributions sliding back 7 or so years to 3% of your 2013 contributions. Some people choose to leave the account intact holding the least expensive fund until the surrender fees expire. Others prefer to rip off the band-aid. You'll want to push the advisor for clarity regarding what your costs will be upon transfer.
Mostly you want to direct all future contributions to the 457.
The school districts are often quite ignorant regarding their 403b offerings. That's another conversation.
i was thinking on switching provider and just contribute $200/ months and $900 for the new 547b plan, is that a good move? i not in the position of maxing out the 547b at the moment. thanks
Re: newbie here, 457b plan
Let me read the thread again and look at your numbers before I respond in more detail relative to your contributions and your portfolio.
There's no need to contribute to a 403b unless you will exceed the 457 limits. My suggestion would be to transfer it and leave it alone. You can roll it into a Rollover IRA when you retire or leave the district.
I suppose in the interim you could move it all into the EQ 500, which seems to have the lowest ER. First, you'll want to make sure there's no fee for changing funds. These accounts are very sticky.
I completely understand that you can't max your contributions. I never maxed out my 403b. I taught for 30 years and my pension and SS will exceed my expenses. What my portfolio offers is financial freedom and possibilities.
As someone who will receive a pension, there are times when a mix of Roth and Traditional contributions are ideal.
Do you know your current tax bracket or you could give a ballpark gross salary & marital status?
What is the annual amount you have to contribute?
I can make suggestions from there.
There's no need to contribute to a 403b unless you will exceed the 457 limits. My suggestion would be to transfer it and leave it alone. You can roll it into a Rollover IRA when you retire or leave the district.
I suppose in the interim you could move it all into the EQ 500, which seems to have the lowest ER. First, you'll want to make sure there's no fee for changing funds. These accounts are very sticky.
I completely understand that you can't max your contributions. I never maxed out my 403b. I taught for 30 years and my pension and SS will exceed my expenses. What my portfolio offers is financial freedom and possibilities.
As someone who will receive a pension, there are times when a mix of Roth and Traditional contributions are ideal.
Do you know your current tax bracket or you could give a ballpark gross salary & marital status?
What is the annual amount you have to contribute?
I can make suggestions from there.
Re: newbie here, 457b plan
retiredjg, with a pension in the future, would you recommend the OP do 100% traditional or a blend of traditional and Roth for future contributions of approximately $11,000 per year?retiredjg wrote: ↑Mon May 10, 2021 12:26 pm That's an ugly list although it is typical of 403b plans in the past. If you stay with this vendor,I suggest that you move everything to the 500 index and possibly the guaranteed interest fund depending on what it is paying. Do not worry about the expense ratio of the guaranteed interest fund - what it pays is after expenses.
Stop making contributions here and start with the 457, building the rest of the portfolio around what you have here.
Better yet...if you can...move this money and future contributions to another vendor with lower costs.
Re: newbie here, 457b plan
Sahara wrote: ↑Mon May 10, 2021 12:41 pm Let me read the thread again and look at your numbers before I respond in more detail relative to your contributions and your portfolio.
There's no need to contribute to a 403b unless you will exceed the 457 limits. My suggestion would be to transfer it and leave it alone. You can roll it into a Rollover IRA when you retire or leave the district.
I suppose in the interim you could move it all into the EQ 500, which seems to have the lowest ER. First, you'll want to make sure there's no fee for changing funds. These accounts are very sticky.
I completely understand that you can't max your contributions. I never maxed out my 403b. I taught for 30 years and my pension and SS will exceed my expenses. What my portfolio offers is financial freedom and possibilities.
As someone who will receive a pension, there are times when a mix of Roth and Traditional contributions are ideal.
Do you know your current tax bracket or you could give a ballpark gross salary & marital status?
What is the annual amount you have to contribute?
I can make suggestions from there.
my gross salary is 73k /years will incrrase by 2k for the next 5 years, so i gess im in the 12%? im not married but living with my fiance with out 3 kids, the max i can contribute if i stop the 403b is 13k/year, lol, trying my best here
Re: newbie here, 457b plan
Let's see
Salary 73,000
Subtract 403b contributions 11,000
Net 62,000
Subtract Standard Deduction 14,050
Net 47,950
Top of the 12 % bracket for 2021 40,525
So you're just creeping into the 22% bracket and those contributions have a positive impact.
The taxes will change when you are married, with a larger standard deduction and dependent credits, and additional income from your fiancee.
You'll want to look at it holistically at that point.
Do you ideally plan to stay with this position until retirement?
Salary 73,000
Subtract 403b contributions 11,000
Net 62,000
Subtract Standard Deduction 14,050
Net 47,950
Top of the 12 % bracket for 2021 40,525
So you're just creeping into the 22% bracket and those contributions have a positive impact.
The taxes will change when you are married, with a larger standard deduction and dependent credits, and additional income from your fiancee.
You'll want to look at it holistically at that point.
Do you ideally plan to stay with this position until retirement?
Re: newbie here, 457b plan
yes, good benefits, specifically with a kid with a whole bunch of conditions, i really love my job. also good paying job for my tradeSahara wrote: ↑Mon May 10, 2021 1:11 pm Let's see
Salary 73,000
Subtract 403b contributions 11,000
Net 62,000
Subtract Standard Deduction 14,050
Net 47,950
Top of the 12 % bracket for 2021 40,525
So you're just creeping into the 22% bracket and those contributions have a positive impact.
The taxes will change when you are married, with a larger standard deduction and dependent credits, and additional income from your fiancee.
You'll want to look at it holistically at that point.
Do you ideally plan to stay with this position until retirement?
Re: newbie here, 457b plan
Great, that makes a lot of sense. For now, my suggestions would be as follows:
Keep asking questions. Make sure you have a will, etc. Make sure you have an Emergency fund. Work together with your fiancee on your financial goals.
Move the $70,000 to the least expensive 403b. You are paying at least $700 per year in ER’s plus whatever other fees there are. Moving will pay itself back in under 3 years. Just rip off the band-aid. It will take time and tenacity to get the transfer done, so be prepared.
403b $70,000 New provider - Aspire? Index funds. No new contributions
60% Total Stock Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
There is also a template recommended for overall reviews. If you want to edit your original post using the pencil icon, forum members will be more likely to provide overall suggestions
viewtopic.php?f=1&t=6212
Keep asking questions. Make sure you have a will, etc. Make sure you have an Emergency fund. Work together with your fiancee on your financial goals.
Move the $70,000 to the least expensive 403b. You are paying at least $700 per year in ER’s plus whatever other fees there are. Moving will pay itself back in under 3 years. Just rip off the band-aid. It will take time and tenacity to get the transfer done, so be prepared.
403b $70,000 New provider - Aspire? Index funds. No new contributions
60% Total Stock Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
There is also a template recommended for overall reviews. If you want to edit your original post using the pencil icon, forum members will be more likely to provide overall suggestions
viewtopic.php?f=1&t=6212
Re: newbie here, 457b plan
god, wish i could give you a huge hug thanksSahara wrote: ↑Mon May 10, 2021 1:29 pm Great, that makes a lot of sense. For now, my suggestions would be as follows:
Keep asking questions. Make sure you have a will, etc. Make sure you have an Emergency fund. Work together with your fiancee on your financial goals.
Move the $70,000 to the least expensive 403b. You are paying at least $700 per year in ER’s plus whatever other fees there are. Moving will pay itself back in under 3 years. Just rip off the band-aid. It will take time and tenacity to get the transfer done, so be prepared.
403b $70,000 New provider - Aspire? Index funds. No new contributions
60% Total Stock Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
There is also a template recommended for overall reviews. If you want to edit your original post using the pencil icon, forum members will be more likely to provide overall suggestions
viewtopic.php?f=1&t=6212
Re: newbie here, 457b plan
Not enough information to make a suggestion. However, I think everybody should be saving some in tax-deferred accounts and some in Roth accounts if available. If there is a pension involved, that fact argues for more Roth...maybe 50:50. But every situation is different.Sahara wrote: ↑Mon May 10, 2021 12:59 pmretiredjg, with a pension in the future, would you recommend the OP do 100% traditional or a blend of traditional and Roth for future contributions of approximately $11,000 per year?retiredjg wrote: ↑Mon May 10, 2021 12:26 pm That's an ugly list although it is typical of 403b plans in the past. If you stay with this vendor,I suggest that you move everything to the 500 index and possibly the guaranteed interest fund depending on what it is paying. Do not worry about the expense ratio of the guaranteed interest fund - what it pays is after expenses.
Stop making contributions here and start with the 457, building the rest of the portfolio around what you have here.
Better yet...if you can...move this money and future contributions to another vendor with lower costs.
Link to Asking Portfolio Questions
Re: newbie here, 457b plan
My pleasure. I believe in paying it forward. Don't forget to mention the evils of the Equitable plan to your friends at work.
Re: newbie here, 457b plan
retiredjg wrote: ↑Mon May 10, 2021 1:42 pmNot enough information to make a suggestion. However, I think everybody should be saving some in tax-deferred accounts and some in Roth accounts if available. If there is a pension involved, that fact argues for more Roth...maybe 50:50. But every situation is different.Sahara wrote: ↑Mon May 10, 2021 12:59 pmretiredjg, with a pension in the future, would you recommend the OP do 100% traditional or a blend of traditional and Roth for future contributions of approximately $11,000 per year?retiredjg wrote: ↑Mon May 10, 2021 12:26 pm That's an ugly list although it is typical of 403b plans in the past. If you stay with this vendor,I suggest that you move everything to the 500 index and possibly the guaranteed interest fund depending on what it is paying. Do not worry about the expense ratio of the guaranteed interest fund - what it pays is after expenses.
Stop making contributions here and start with the 457, building the rest of the portfolio around what you have here.
Better yet...if you can...move this money and future contributions to another vendor with lower costs.
sorry. can you explain a bit more? 50% to 403/457 and 50% to an ira, of course if 403/457 are maxed out every year?
Re: newbie here, 457b plan
You could do
12,000 annual
6,000 457 Roth
6,000 457 Traditional
OR
12,000 annual
6,000 457 Traditional
6,000 Brokerage (Vanguard, Fidelity, Schwab) Roth IRA
The rationale here is as follows:
Someone without a pension contributes to a pre tax (traditional) account while in the 22% bracket or higher. This person withdraws the money in retirement in a lower tax bracket. Thus, successful tax avoidance.
Someone with a pension contributes to a pre tax (traditional) account while in the 22% bracket or higher. This person withdraws the money in retirement on top of a pension and SS, possibly in the same tax bracket or a higher tax bracket.
You would have to do some long-term calculations, many of which are based on tax legislation subject to repeated change over the next 20 years, to precisely determine your tax bracket in retirement.
The simple solution is to contribute 50:50 until you get closer and are able to do a more accurate projection.
The previous suggestion was max the pre tax 19,500 and then contribute to Roth. Given the pension potential, this may be a better way to approach it.
12,000 annual
6,000 457 Roth
6,000 457 Traditional
OR
12,000 annual
6,000 457 Traditional
6,000 Brokerage (Vanguard, Fidelity, Schwab) Roth IRA
The rationale here is as follows:
Someone without a pension contributes to a pre tax (traditional) account while in the 22% bracket or higher. This person withdraws the money in retirement in a lower tax bracket. Thus, successful tax avoidance.
Someone with a pension contributes to a pre tax (traditional) account while in the 22% bracket or higher. This person withdraws the money in retirement on top of a pension and SS, possibly in the same tax bracket or a higher tax bracket.
You would have to do some long-term calculations, many of which are based on tax legislation subject to repeated change over the next 20 years, to precisely determine your tax bracket in retirement.
The simple solution is to contribute 50:50 until you get closer and are able to do a more accurate projection.
The previous suggestion was max the pre tax 19,500 and then contribute to Roth. Given the pension potential, this may be a better way to approach it.
Re: newbie here, 457b plan
I meant 50% to tax-deferred accounts and 50% to Roth accounts. It was just an example, not a specific suggestion to you because there is not enough information about your situation to have an opinion.
I didn't want you to get the idea that people with a pension should be saving everything in Roth accounts, but probably more than people without a pension.
Link to Asking Portfolio Questions
Re: newbie here, 457b plan
ok, i understandretiredjg wrote: ↑Mon May 10, 2021 2:09 pmI meant 50% to tax-deferred accounts and 50% to Roth accounts. It was just an example, not a specific suggestion to you because there is not enough information about your situation to have an opinion.
I didn't want you to get the idea that people with a pension should be saving everything in Roth accounts, but probably more than people without a pension.
Re: newbie here, 457b plan
This would be fine if this is your only account. However, if you move your other account to 500 index, you will not need it here for quite awhile.
Have you decided what you want to do with the other account?
Have you decided what you want to do with the other account?
Link to Asking Portfolio Questions
Re: newbie here, 457b plan
ok, so im switching my 403 from axa to aspire, with the funds i just posted, no more contributions moving forward, opened a new 457b which i'll start contributing on my next paycheck, or should i just move from axa to aspire and just dump it all to a 500 index?
Re: newbie here, 457b plan
I was typing my response as you were typing yours.
I just want to verify the overall plan to make sure that our recommendations are appropriate.
Is this below what you would like to do? Or do you plan to contribute to the new 403b moving forward?
403b $70,000 Transfer to new provider - Aspire? Index funds. No new contributions?
60% 500 Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month Possibly split 50/50 Roth and Traditional?
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
Just in overall educational terms, the 500 Index is fine. Some mighty suggest FSKAX Fidelity® Total Market Index.
Some might also recommend adding another fund in the 457 as it grows to "approximate" the total stock market but I would keep it simple for now. These are minor concepts that will not have a great impact, however, some people find them important.
You'll have to decide whether you are one of them.
I just want to verify the overall plan to make sure that our recommendations are appropriate.
Is this below what you would like to do? Or do you plan to contribute to the new 403b moving forward?
403b $70,000 Transfer to new provider - Aspire? Index funds. No new contributions?
60% 500 Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month Possibly split 50/50 Roth and Traditional?
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
Just in overall educational terms, the 500 Index is fine. Some mighty suggest FSKAX Fidelity® Total Market Index.
Some might also recommend adding another fund in the 457 as it grows to "approximate" the total stock market but I would keep it simple for now. These are minor concepts that will not have a great impact, however, some people find them important.
You'll have to decide whether you are one of them.
Re: newbie here, 457b plan
Sahara wrote: ↑Tue May 11, 2021 9:14 am I was typing my response as you were typing yours.
I just want to verify the overall plan to make sure that our recommendations are appropriate.
Is this below what you would like to do? Or do you plan to contribute to the new 403b moving forward?
403b $70,000 Transfer to new provider - Aspire? Index funds. No new contributions?
60% 500 Index
30% Total International Index
10% Total Bond Index
NY 457 New Contributions Approximately $1,000 per month Possibly split 50/50 Roth and Traditional?
60% NYSDCB Equity Index Unitized Account
30% International Equity Fund - Index Portfolio
10% NYSDCB U.S. Debt Index Unitized Account
Just in overall educational terms, the 500 Index is fine. Some mighty suggest FSKAX Fidelity® Total Market Index.
Some might also recommend adding another fund in the 457 as it grows to "approximate" the total stock market but I would keep it simple for now. These are minor concepts that will not have a great impact, however, some people find them important.
You'll have to decide whether you are one of them.
no more contributions to the 403b, just set it and forget it
50% to the new 457b
50% to a new IRA account on Fidelity using Fidelity Zero as now
Re: newbie here, 457b plan
Last edited by enkuero on Wed May 12, 2021 4:12 pm, edited 1 time in total.
Re: newbie here, 457b plan
Nice!
There are a lot of ways to divide things up.
I'm sharing a spreadsheet I use. The first tab would illustrate the accounts with $70,000, $6,000 and $6,000 - kind of an illustration of what it would look like in 12 months.
For simplicity, you could do all Total stock in the Roth and use the others for international. Or mix it up any way that works for you.
The second tab I use for deciding how to manage contributions.
Make a copy and you can play around with it as you move forward.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
There are a lot of ways to divide things up.
I'm sharing a spreadsheet I use. The first tab would illustrate the accounts with $70,000, $6,000 and $6,000 - kind of an illustration of what it would look like in 12 months.
For simplicity, you could do all Total stock in the Roth and use the others for international. Or mix it up any way that works for you.
The second tab I use for deciding how to manage contributions.
Make a copy and you can play around with it as you move forward.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
Re: newbie here, 457b plan
Sahara wrote: ↑Tue May 11, 2021 9:43 am Nice!
There are a lot of ways to divide things up.
I'm sharing a spreadsheet I use. The first tab would illustrate the accounts with $70,000, $6,000 and $6,000 - kind of an illustration of what it would look like in 12 months.
For simplicity, you could do all Total stock in the Roth and use the others for international. Or mix it up any way that works for you.
The second tab I use for deciding how to manage contributions.
Make a copy and you can play around with it as you move forward.
https://docs.google.com/spreadsheets/d/ ... sp=sharing
wow thanks you soo much
Re: newbie here, 457b plan
You're very welcome.
With your transfer - your money will "disappear" for 7 to 14 days. Upon successful transfer, the money will re-appear in the destination (Aspire) account. Then you'll "exchange" it into your desired funds.
Good luck and keep us posted.
With your transfer - your money will "disappear" for 7 to 14 days. Upon successful transfer, the money will re-appear in the destination (Aspire) account. Then you'll "exchange" it into your desired funds.
Good luck and keep us posted.
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- Location: Illinois
Re: newbie here, 457b plan
Those are excellent fund choices for your 403b account with Aspire.
In your 457b I suggest using these funds:
1) NYSDCB (BlackRock) Equity Index Unitized Account (S&P 500 Index, 80% of U.S. stock market) ER 0.01%
2) (Northern Trust) International Equity Fund - Index Portfolio (MSCI EAFE Index, developed markets only) ER 0.16%; and
3) NYSDCB (BlackRock) US Debt Index Unitized Account (Bloomberg Barclays U.S. Aggregate Bond Index) ER 0.02%.
The maximum annual employee contribution permitted to your 457b account is $19.5k. I suggest making the maximum 457b contributions you can afford, split 1/2 traditional and 1/2 Roth.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
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