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Second Job 403 vs 457

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  • Second Job 403 vs 457

    I'll be starting a small teaching job at a local university on the side and will now have access to a 457b and 403b.  It's only 12,000 per year salary but I plan to defer it all into either the governmental 457b or the 403b.   My regular employer's 401k is all employer profit sharing contributions so I think I could use either and not run into problems with excess employee contributions. The distribution options for the 457b are quite good--at the time of distribution I can pick anytime between then and age 70.5 to begin distribution and pick any number of years to have it distributed over.

    It seems the 457b would be the right choice, but is there any reason why I would favor a 403b over the 457b in this scenario?

  • #2
    I will move forward with 457b.

    Maybe it would be worthwhile to put a little into 403b at some point before I leave to have the account available if I change jobs.

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    • #3
      You don't contribute any employee portion to your 401k?

      Comment


      • #4




        You don’t contribute any employee portion to your 401k?
        Click to expand...


        At my old practice, there was an employee share to 401k and employer share.  At my new practice, I have been told it is entirely employer profit sharing which maxes it out.

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        • #5
          got it. then 457.

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          • #6


            The distribution options for the 457b are quite good–at the time of distribution I can pick anytime between then and age 70.5 to begin distribution and pick any number of years to have it distributed over.
            Click to expand...


            Since it's governmental, it s/b treated same as 401k, i.e. can r/o to an IRA. Since you can take it at any time between retirement and age 70.5, the univ s/b an NPO.


            Maybe it would be worthwhile to put a little into 403b at some point before I leave to have the account available if I change jobs.
            Click to expand...


            I may be missing the point - why would you want to have a 403b available?
            Financial planning, investment management and CPA services for medical professionals | 270-247-6087

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            • #7



               


              Maybe it would be worthwhile to put a little into 403b at some point before I leave to have the account available if I change jobs. 
              Click to expand…


              I may be missing the point – why would you want to have a 403b available?
              Click to expand...


              Would it provide the same thing a solo401k would provide if one changed jobs?  A place to roll over a 401k into without having to open an IRA?  If left my main job, would it be a place to roll the 401k into?

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              • #8
                Any match on the 403b? I'm assuming not but is a consideration.

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                • #9






                   


                  Maybe it would be worthwhile to put a little into 403b at some point before I leave to have the account available if I change jobs.
                  Click to expand…


                  I may be missing the point – why would you want to have a 403b available?
                  Click to expand…


                  Would it provide the same thing a solo401k would provide if one changed jobs?  A place to roll over a 401k into without having to open an IRA?  If left my main job, would it be a place to roll the 401k into?
                  Click to expand...


                  No. It would be held at the former employer, which would not accept rollovers.
                  Financial planning, investment management and CPA services for medical professionals | 270-247-6087

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                  • #10
                    No match on either.

                    Comment


                    • #11
                      From CNBC

                      Why these teachers’ retirement plans aren’t making the grade


                      Points





                      • Public school teachers may save up to $18,500 annually in a 403(b) plan, plus an additional $6,000 if they’re over 50.

                      • While total costs for 401(k) plans hit an average of 0.88 percent, annuity-based 403(b) plans that are not subject to federal protections can have annual fees of around 2.5 percent.

                      • It may make sense to explore other savings opportunities, including a Roth IRA or state government 457(b) retirement plans.


                      https://www.cnbc.com/2018/09/28/why-these-teachers-retirement-plans-arent-making-the-grade.html


                      From NYT:


                      Margaret Jusinski first got to know her investment broker through the breakfasts he provided when he visited her public school in the leafy suburbs of New Jersey, where she teaches middle-school children computer coding and how to build robots made of Legos.


                      After the bagels, muffins and coffee, the broker made his sales pitch — and Ms. Jusinski bought it. So did many of her colleagues.


                      The teachers only recently learned how much those meals actually cost them.


                      Had she been able to choose a simpler, less expensive plan instead of the broker’s costly offering, Ms. Jusinski would have approximately 20 percent more in savings, according to an analysis performed for The New York Times. One colleague would have a balance 50 percent fatter.




                      https://www.nytimes.com/2016/10/23/your-money/403-b-retirement-plans-fees-teachers.html


                       



                       



                       


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                      • #12
                        Seems like the exit strategy is your focal point.
                        Which one is better regarding fees and available investments?
                        Cart before the horse? Might make a difference whether you leave them be!

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