Jump to content
Sign in to follow this  
kirklandfan

Nationwide 457 fees

Recommended Posts

Hi,

 I make to much to contribute to a regular roth. Should I continue to contribute Vanguard 403b($2000),  Roth Vanguard 403b ($600), and Nationwide 457 ($600). Would I be better off doing a backdoor roth ira? School First Credit Union only offers Nationwide 457? Your help will be appreciated.

Share this post


Link to post
Share on other sites

What are the fees on the 457? Administration fee and fund expense ratio? Are you planning on retiring early? The backdoor Roth IRA is great but be sure you get the Form 8606 done correctly. There’s lots of guidance on the internet. 

Share this post


Link to post
Share on other sites

My system has schools first FCU as the TPA and Nationwide is, obnoxiously,  the only 457 fund provider option (though read on...).  Nationwide takes a large admin fee on top of the fund expenses: the fee is .65 % per year, if memory serves, though you should check that as I'm no longer contributing there. 

There is one other option through the Schools First FCU 457: something called a DCP or share certificate, which is very much like a bank CD but pays a better rate than current CDs (though these days I'm sure the rate on a new certificate is pretty low, like everyplace).  That is a decent fixed-asset alternative you can fund within the 457, and you completely avoid Nationwide and their fees--talk to a schoolsfirst rep about that if you are interested.  I don't think there are any Roth options in that 457 plan.

If you decide to contribute excess (above the 403b limit) funds to the 457, be aware that the 457 regs have changed, so that you can now roll that 457b money over into a conventional IRA after age 59 1/2, even when still employed (I did this), and you can still continue to make contributions to the Nationwide account after the rollover.  So there is a way to escape the Nationwide fees once you reach that age. 

Share this post


Link to post
Share on other sites

Sorry! I forgot to add the fees. Nationwide 457 plan  is .60 fees. I keep wondering if it would better to figure out the roth backdoor steps and not contribute to

roth 403b. I just thought it would be to complicated.  I really don't want to pay Nationwide 457 fees, but the CD rates for five years in 2.08% at my credit union. I

am going to retire 8 years. 

WHY ME thanks for the information you have already given.

Share this post


Link to post
Share on other sites

If you want some safe fixed income in your retirement mix, 2% is well above average these days, I'd take that option seriously.  Otherwise, I'd just put up with the Nationwide fees for 8 years (or less if you turn 59 1/2 before then) to fatten your tax-favored nestegg.  

I don't know anything about backdoor Roths, but if you are planning to convert from a traditional to a Roth, in many cases there is a period of a few years after retiring and before RMDs are required when your taxable income is reduced--that is a good time to make the conversions and potentially pay less tax than you might during your peak earning years.

Share this post


Link to post
Share on other sites

As you know, the backdoor Roth IRA process is a good way to get around the income limit to making a direct Roth IRA contribution. If the alternative is putting the 6k (or 7k if >50) into a taxable brokerage account, it's a no-brainer. But if you can use the 457b to get a fixed income of 2%, I think I'd go for that. Rolling it out to an IRA after age 59.5 would make sense. Here's a good tutorial on the backdoor Roth process:  https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...