Roth IRA vs Roth 457(b): Which Should You Prioritize?
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Another benefit of a governmental 457b is i n the last 3 years prior to regular retirement age, you can make up to double contributions. ( This year $19.5k + $ 19.5k)
I'm a government employee. 75k salary. 10.4% goes to my pension ($7826) 8% Roth IRA ($6k) 7% 457 ($5200).
I’m in a similar situation. In law enforcement. My employer pulls 9% towards my pension. I’m maxing out my Roth IRA, however I went with the pretax 457(b). Not yet maxing that out but getting there. My plans to use the pension and 457(b) and only touch the Roth if I really need to. I’d like to let that tax free piggy bank keep compounding as long as I can.
Do you have a video in which you go into more detail on the FOO?
I have a 401(A) with mandatory 3% and matched 100% 3.2%. I'm putting around 8% in my HSA investments. I have a 457 w/Roth option available that I'm thinking of putting 3% – 5%.
Be careful. Pretax 457b doesn't have an age restriction for distributions however Roth 457b does, 59.5. On top of that, earnings from non-qualified distributions on a Roth 457b are subject to taxes and penalties based on pro-rata (as in you can't just withdraw contributions like you can with a Roth IRA).
Love this channel, keep up the high quality work!
I am of the opinion – Porque no los dos?
I currently have a Roth 457B that our school just started to offer us in 2021 as a public school teacher. They are also given us a match in a 401A. I have been maxing my Roth IRA for years and my HSA. I am using my Roth 457B as a bridge account when I retire at 56 years old. I am currently 40 years old. Feel blessed to be able to have these accounts that I can contribute to every month for my families future.
Thank you guys for the great advice as always.
Great job explaining that
I get a 25% match on the first $1500 put in to my 457b. So I make sure to first put $1500 in the 457 to get the free $375, then I max out my Roth IRA, then I will open a brokerage as income increases. I “should” also have a pension when I retire at ~57 so I just need to have a short bridge funded by the 457 and brokerage accounts, if needed…
Yep max out the ROTH IRA and anything left throw in the 457.
Brian is the investing king! I am inspired by his channel. Brian inspires me to continue my own YouTube channel on Finance and Investing.