CalPers 457 vs. Vanguard 403(b)

[gmt]

My wife is a teacher and has the option to invest in CalPers and also in Vanguard through her 403(b).  We already have her set up through Vanguard for her 403(b) but now I am wondering if we should have money going to CalPers instead.  Or should we split our contribution between the two?  We can't completely max out either one at this time.

Does anyone have experience with these two options?  What would you do?

Thanks.

 

[ats5g]

The Calpers 457 investment options look fairly cheap, the index funds anyway. However, there are no cheap REIT, TIPS, EM, etc. options. IIRC, 457 plans will allow you withdraw from them when you seperate from service, regardless of your age, so 457's may be better for those planning to retire early. However, you should check the plan literature.

Splitting the $$ b/w the 457 and 403(b) at Vanguard would certainly give you more investment options, but you may want to check the added fees with the 403(b) at Vanguard. You may have to pay $15 a year for each fund.

- Alec

 

[maddythebeagle]

The Calpers 457 investment options look fairly cheap, the index funds anyway. However, there are no cheap REIT, TIPS, EM, etc. options. IIRC, 457 plans will allow you withdraw from them when you seperate from service, regardless of your age, so 457's may be better for those planning to retire early. However, you should check the plan literature.

Splitting the $$ b/w the 457 and 403(b) at Vanguard would certainly give you more investment options, but you may want to check the added fees with the 403(b) at Vanguard. You may have to pay $15 a year for each fund.

agreed. I have a 457 plan with 4 index funds ranging in expense ratios from 0.02-0.10%, which you cant beat...

 

[yakers]

Sounds like agood problem to have. My wife had a crappy LAUSD 403b. If you school district has a 403b with a Vanguard option consider yourself lucky. My son works in a county in CA and has CALPERS plan and it looked good to me when I looked over it in some detail. They really manage it themselves but their track record is excellent. If the 403b fees are low (not through some structured annuity with surrender fees & the like) then both is a good option. I do not know how much is permitted under tha plans but I have seen cases where full contributions could be made to both, essentially doubling the amount that can be saved pretax. If so and you can afford it do both fully. If not 50/50 would be agood way to go and you can add contributions in future yeras to your best advantage.

 

[Gumby]

..

 

[gmt]

Alec- thanks for the link to fund expenses.  I'm pretty cheap when it comes to expenses, so it looks like most of the funds (over 1.0) are too expensive for me.  I am really trying to manage all of our investments as if they were under one asset allocation plan, so maybe I could use the index funds in the 457 plan and the other cheaper asset classes offered by Vanguard in the 403(b). 
I didn't realize that 457 funds could be withdrawn regardless of age.  I will check in to this as it sounds like this could make ER easier.  You make an excellent point about the Vanguard fees for multiple funds.  I know I am getting hit with a few of those now. 

Maddy- I agree, I love low expense index funds.  Call me boring, but over time I am hoping to amass enough wealth to where those fees actually matter.

Yakers- you are correct, it is a nice problem to have.  Especially considering that my employer does not offer any sort of retirement plan.  So our Roths and my wifes retirement plans are all we have in terms of tax deferred savings.  I will check in to make sure that we can do both.  We can't afford to max out both right now (too much debt to pay off), but I anticipate that will change in the near future.

Gumby- our goal is to max out both, but as I mentioned above, we aren't quite there yet.

Thank you all for your insights.  It looks like I have a little bit more homework to do before I can help DW make a decision.

gmt