A 457(b) plan is available to me at work. This is a really good plan that includes Dodge & Cox Stock, Calamos Growth Fund, Julius Baer International fund, and other good funds. All loads are waived. The plan itself has an annualized administrative fee of 18.9 basis points (0.189%).
I also recently opened a Roth IRA. Right now, I have TAVFX, FAIRX, and DODFX in it, and I plan to buy CGMFX soon.
I know people rave about the Roth IRA being great, but the 457(b) is even better for people who retire before age 59 1/2. You can withdraw the money (contributions and earnings) at any age with NO penalty. This is great since I hope to retire in my early 50s. However, the withdrawals (contributions and earnings) are taxed.
With the Roth IRA, there is a 10% penalty if you withdraw earnings before age 59 1/2 (unless you annuitize), and the earnings (not contributions) are taxed if withdrawn before age 59 1/2.
I'm 25 years old. My employer does not fund my 457(b) at all. It is entirely funded by the employee (myself). My annual income is $31,000.
Since the 457(b) has more attractive early-retirement withdrawal features, should I focus on funding the 457(b) as much as I can, then funding the Roth IRA?
Thanks for your advice.