newbie here, 457b plan

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Topic Author
enkuero
Posts: 33
Joined: Sun May 02, 2021 8:47 am

newbie here, 457b plan

Post by enkuero »

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
Last edited by enkuero on Mon May 10, 2021 10:09 pm, edited 1 time in total.
lakpr
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Re: newbie here, 457b plan

Post by lakpr »

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.
Topic Author
enkuero
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Joined: Sun May 02, 2021 8:47 am

Re: newbie here, 457b plan

Post by enkuero »

thanks, the only problem i have with my 403b is that they are changing me a lor on fees
lakpr
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Re: newbie here, 457b plan

Post by lakpr »

enkuero wrote: Sat May 08, 2021 9:08 am thanks, the only problem i have with my 403b is that they are changing me a lor on fees
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?
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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.

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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

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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

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1290 VT Small Cap Value

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EQ/Equity 500 Index

EQ/Fr Sm Cap Val Managed Vol

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EQ/Int Core Managed Vol

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EQ/International Equity Index

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EQ/Invesco International Grwth

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lakpr
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Re: newbie here, 457b plan

Post by lakpr »

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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

Image

here the providers, im an electrician for a school district, funny you cant find anywhere the expense ratios, they are very sneaky
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ruralavalon
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Re: newbie here, 457b plan

Post by ruralavalon »

Welcome to the forum :D .


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
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.

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
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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 ?
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ruralavalon
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Re: newbie here, 457b plan

Post by ruralavalon »

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 ?
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.

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
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

ruralavalon wrote: Sat May 08, 2021 12:13 pm Welcome to the forum :D .


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
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.

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?
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 regretting
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
lakpr
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Re: newbie here, 457b plan

Post by lakpr »

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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

lakpr 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.
thanks, ill look into it, not sure if i have to pay a fee to transfer it
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

enkuero wrote: Sat May 08, 2021 1:52 pm
lakpr 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.
thanks, ill look into it, not sure if i have to pay a fee to transfer it
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.

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.
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ruralavalon
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Re: newbie here, 457b plan

Post by ruralavalon »

Sahara wrote: Sat May 08, 2021 2:31 pm
enkuero wrote: Sat May 08, 2021 1:52 pm
lakpr 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.
thanks, ill look into it, not sure if i have to pay a fee to transfer it
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.

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.
For the Roth IRA, when you get to that point, I suggest a low cost fund firm such as Vanguard, Fidelity or Schwab.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
earflop
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Re: newbie here, 457b plan

Post by earflop »

enkuero wrote: Sat May 08, 2021 12:08 pm here the providers, im an electrician for a school district, funny you cant find anywhere the expense ratios, they are very sneaky
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
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

earflop wrote: Sat May 08, 2021 4:06 pm
enkuero wrote: Sat May 08, 2021 12:08 pm here the providers, im an electrician for a school district, funny you cant find anywhere the expense ratios, they are very sneaky
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
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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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
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.

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.
retire2022
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Re: newbie here, 457b plan

Post by retire2022 »

enkuero wrote: Sat May 08, 2021 5:22 pm wow, thanks a lot, im glad i came here….
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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

retire2022 wrote: Sun May 09, 2021 11:44 am
enkuero wrote: Sat May 08, 2021 5:22 pm wow, thanks a lot, im glad i came here….
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.
im tier 4, vested
retire2022
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Re: newbie here, 457b plan

Post by retire2022 »

enkuero wrote: Sun May 09, 2021 3:46 pm
im tier 4, vested
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
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enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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 .


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Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
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retiredjg
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Re: newbie here, 457b plan

Post by retiredjg »

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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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.
Image

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
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
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?
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enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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?
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

Sahara 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?
yes, good benefits, specifically with a kid with a whole bunch of conditions, i really love my job. also good paying job for my trade
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

Sahara 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
god, wish i could give you a huge hug 🤗 thanks
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retiredjg
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Re: newbie here, 457b plan

Post by retiredjg »

Sahara wrote: Mon May 10, 2021 12:59 pm
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.
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?
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
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Re: newbie here, 457b plan

Post by Sahara »

My pleasure. I believe in paying it forward. Don't forget to mention the evils of the Equitable plan to your friends at work.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

retiredjg wrote: Mon May 10, 2021 1:42 pm
Sahara wrote: Mon May 10, 2021 12:59 pm
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.
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?
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.

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?
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
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retiredjg
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Re: newbie here, 457b plan

Post by retiredjg »

enkuero wrote: Mon May 10, 2021 1:49 pm 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?
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.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

retiredjg wrote: Mon May 10, 2021 2:09 pm
enkuero wrote: Mon May 10, 2021 1:49 pm 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?
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.
ok, i understand
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

HI all, i started the application for the new 403b plan, they have tons and tons of funs available that my plan provides, as now here my list and allocations, open for suggestions too, thanks

Image
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retiredjg
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Re: newbie here, 457b plan

Post by retiredjg »

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?
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

retiredjg wrote: Tue May 11, 2021 8:43 am 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?
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?
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
Topic Author
enkuero
Posts: 33
Joined: Sun May 02, 2021 8:47 am

Re: newbie here, 457b plan

Post by enkuero »

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
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

enkuero wrote: Tue May 11, 2021 9:27 am 50% to a new IRA account on Fidelity using Fidelity Zero as now
Excellent progress. Roth, correct? Your limit will be $6,000 per year in that account.
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

Sahara wrote: Tue May 11, 2021 9:29 am
enkuero wrote: Tue May 11, 2021 9:27 am 50% to a new IRA account on Fidelity using Fidelity Zero as now
Excellent progress. Roth, correct? Your limit will be $6,000 per year in that account.

yes, already started putting some money in to it for the 2020 year
Last edited by enkuero on Wed May 12, 2021 4:12 pm, edited 1 time in total.
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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
Topic Author
enkuero
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Re: newbie here, 457b plan

Post by enkuero »

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 :D :D
Sahara
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Re: newbie here, 457b plan

Post by Sahara »

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.
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ruralavalon
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Location: Illinois

Re: newbie here, 457b plan

Post by ruralavalon »

enkuero wrote: Tue May 11, 2021 8:28 am HI all, i started the application for the new 403b plan, they have tons and tons of funs available that my plan provides, as now here my list and allocations, open for suggestions too, thanks

Image
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 | Wiki article link: Bogleheads® investment philosophy
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