DW 403B Plan

[davemartin88]

I'm early retiring at the end of the month after taking a package at Megacorp- was given 30 days notice last week, 10/3 is the last day on the payroll.

Given that Megacorp had a company match for their 401k plan, we've deposited our pretax savings in that plan but now that I won't be working, considering whether we should start depositing in a 403b plan through my wife's employer. We would have to replace her monthly income from other taxable investments but seems like it would make sense to contribute to the max in her plan to take advantage of the tax deferral.

Haven't investigated the choices we would have thought I'd check my assumption that this makes sense. My wife is under 50 and while the sums involved are relatively small, the only concern I had is that the money wouldn't really be available for nearly 10 years to avoid early withdrawal penalties although if she leaves work (likely in about 5 years), there are some options to get at this money.

Thanks in advance.

 

[travelover]

You'd do well to investigate the investment options and expense ratios in the 403(b) plan . In my own DW's plan, the options and expenses were poor.

Don't forget that as long as your DW is working, you can contribute to a spousal IRA - including a Roth IRA if you meet income limits.

Lastly, if you don't know about 72(t) withdrawals, you'll be pleasantly surprised.

Retire Early: Can I withdraw money from my IRA before age 59½ ?

Oh, and welcome to the forum.

 

[DblDoc]

At least get the company match if available. Beyond that it would depend on the choices and cost.

DD

 

[davemartin88]

Thanks for the replies, my wife is picking up information about the plans to get an idea of the options, I suspect they aren't very good but seems I should at least look. I have read some about the 72t rules and that does seem promising. I did confirm there is no match with her plan so may not turn out to be worthwhile but if I could get to some Vanguard funds or the like, might be okay. What started me thinking about this was an email she received from Lincoln Financial services- took a look there and doesn't look promising.

 

[youbet]

Thanks for the replies, my wife is picking up information about the plans to get an idea of the options, I suspect they aren't very good but seems I should at least look.

Yes, you should look. My wife's choices included both Fidelity and Vanguard. You might get lucky too.

I have read some about the 72t rules and that does seem promising. I did confirm there is no match with her plan so may not turn out to be worthwhile but if I could get to some Vanguard funds or the like, might be okay.

Matching is unusual with 403b plans since the employee is usually receiving a generous public pension in addition to 403b participation.

What started me thinking about this was an email she received from Lincoln Financial services- took a look there and doesn't look promising.

Find our all her options before drawing conclusions.

 

[Coach]

Dave, check out 403bwise.com -- it's a good resource for 403B information. There are some bad actors in that area. Some good ones too.

Coach