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Jim K

403(b) Vs 457(b)

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My daughter asked me for some help. She is early in her career as a university faculty member with a retirement (defined benefit) plan. She has the option of contributing (no match) to a 403(b) or 457(b) plan (the same providers for both plans: AIG-Valic, Fidelity, and TIAA-CREF).

 

Can someone tell me if there is a significant difference to her in either the 403(b) or 457(b)? The only difference I see appears to be if she were late in her career and wanted to do some extra ‘catching up.’

 

Thanks for any advice that I can pass along to her.

 

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My daughter asked me for some help. She is early in her career as a university faculty member with a retirement (defined benefit) plan. She has the option of contributing (no match) to a 403(b) or 457(b) plan (the same providers for both plans: AIG-Valic, Fidelity, and TIAA-CREF).

 

Can someone tell me if there is a significant difference to her in either the 403(b) or 457(b)? The only difference I see appears to be if she were late in her career and wanted to do some extra ‘catching up.’

 

Thanks for any advice that I can pass along to her.

 

 

Dear Jim,

 

Does she know the difference between buying no-load and load? Does she know which one of the three carriers is charging the load? Does she know which one of the Plans is exempt from the 10 percent penalty tax on withdrawals made prior to age 59-1/2? If she was my daughter I would ask her to get back to me with the answers to my questions and then go from there. Is she asking for "some help" or does she expect you to tell her what to do?

 

Peace and Hope,

Joel L. Frank

 

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