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Which Retirement Plan?
Old 10-08-2015, 07:29 PM   #1
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Which Retirement Plan?

My daughter is starting a new permanent job as an oncology nurse in Dallas area. She has been doing oncology traveling nursing for 10+ years, staying 13 weeks at each stop. She has always had a 403b plan. Now she has a choice of 403b or 457 plan. Anyone aware of the differences or if one is favorable over the other? She wants to roll her old 403b plan into the new if possible. She says both have matches. She is mid-30's, single, will earn 90k+, and is wondering how much to contribute. I suggested 1/3 tax deferred, 1/3 Roth (if she qualifies), 1/3 taxable. My other daughter is a Speech Therapy teacher in Dallas and has 457 but no match. I had 401k so no idea about these other plans.

TIA


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Old 10-08-2015, 07:43 PM   #2
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I liked the 457 because I could take money out of it without penalty (only paid the taxes due). It made for more flexibility when I needed it.


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Old 10-09-2015, 03:24 AM   #3
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If I were her dad I would suggest to Have her max out her Roth. Then tax deferred to capture any Match. The. Pretax. Limits are 18000 per year and she should fund to the limit

403B tend to have more investment choices and roll over options vs 457. 403b also is protected like a 401k in litigation
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Old 10-09-2015, 07:32 AM   #4
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If I were her dad I would suggest to Have her max out her Roth. Then tax deferred to capture any Match. The. Pretax. Limits are 18000 per year and she should fund to the limit

403B tend to have more investment choices and roll over options vs 457. 403b also is protected like a 401k in litigation

I guess that depends what companies runs them. My employer uses Fidelity and not only do I have more than enough choices, I can switch my money into a separate acct within the 457 that allows me to buy any stocks and / or any mutual funds. I dont know for sure but Ive never heard that the 457 isn't protected from litigation.
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Old 10-09-2015, 07:46 AM   #5
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457 plans generally allow penalty free withdrawals as soon as you leave the job. that's the big advantage over the 403b.

Remember, you can contribute to both a 457 and a 403b, it's not an either or thing.
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Old 10-09-2015, 08:53 AM   #6
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I guess that depends what companies runs them. My employer uses Fidelity and not only do I have more than enough choices, I can switch my money into a separate acct within the 457 that allows me to buy any stocks and / or any mutual funds. I dont know for sure but Ive never heard that the 457 isn't protected from litigation.
Governmental 457 is held in trust for the benefit of plan participants and carries the same ERISA protection as other qualified plans.

Non-profit 457 is considered an asset of the employer and is available to the employer's creditors in case of litigation.
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Old 10-15-2015, 12:25 PM   #7
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Hnzw_rui is spot on. In addition contribution limits are SEPARATE for 457 and the 403b. If she can live with the income reduction she could tuck quite a bit away using both plans.


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