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bhrisoulis

Which to max first 403 or 457?

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I am a public school teacher and currently max out my 403b.  I also contribute to a 457b but have not maxed that out yet.  I am aware that there are some benefits of a 457 in terms of withdrawing money before 59.5.  I'm thinking there may be other factors as well but just wondering if I should first max out my 457 before maxing my 403?  My 403 is with Vanguard and 457 is with fidelity.  The account fees in both are about the same.  Thanks for any input you can give me.

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15 minutes ago, bhrisoulis said:

My 403 is with Vanguard and 457 is with fidelity.  The account fees in both are about the same.

That  is an enviable situation to be in having both with great choices. You can't lose either way  but this should sum it up nicely and give you more info than I ever could in a paragraph because these topics can be complex.

 

https://www.investopedia.com/articles/personal-finance/111615/457-plans-and-403b-plans-comparison.asp

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On 1/12/2021 at 4:01 PM, bhrisoulis said:

should first max out my 457 before maxing my 403?  

I'm new around here and 34 years old so I'm not going to tell you what you should do but I'll tell you how I see it.  I am working to get a 457 plan added in my district because I would like to focus there.  I have read a lot of "Millionaire Educators" blog posts and heard his story.  He focuses on savings and minimizing taxes.  He uses the 457 to give himself some freedom.  He doesn't really post anymore but the ideas are still relevant.

I think the 457 would give me more peace of mind because then I don't need a huge emergency fund.  If I lose my job I can tap that.  If I save a bunch and hit financial independence, I can decide if I want to separate service on my terms.  I don't know if there is a difference in fees for your plans but I have just transitioned from contributing to Roth IRA to 403b.  I will continue to fund the 403b until I get to a point where the fees are reduced.  Then I will focus on the 457.

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