Employer 457B Fees

My current employer offers a 457B plan (No match). The investment options are not favorable as they include high expense ratios. However, a self-directed Charles Schwab brokerage account offered/managed by Nationwide is available which gives me more access to mutual funds, index, ETF, etc. There is a $25 annual fee that is paid to Nationwide for this account. I assume it’s still a better option to go with this brokerage account with the annual fee to benefit from deferred taxes vs. opening up my own taxable brokerage account? I already have a Roth IRA that I max out as well. Just wanted to get other opinions on this and see if anyone is familiar with a Schwab Personal Choice Retirement Account (PCRA)? Also, if I select a Vanguard Target date through Schwab would there be any additional fees as oppose to selecting Charles Schwab Target date funds? Thanks!

I’m not familiar with that exact product from Schwab, but based on what you said it sounds like exactly what I would do. $25/year is pretty small. Say you have $10K in that account, it’s only a 0.25% annual fee and goes down from there as you increase the amount.

I wouldn’t buy a Vanguard target date fund though because you’ll likely get hit with high transactional fees. Schwab offers their own target date index funds with no transaction fees and very low expense ratios. You can find the ticker symbols here near the bottom:

Thanks! I looked up all the fees between different funds and you are right with sticking with the Charles Schwab index fund. Appreciate the advice and really enjoyed your course!