Hello!
I was looking at the Ultimate Investing Checklist, where the suggested order of investing is:
I wanted to know where a 457b would fit into this if it was available through your employer. I have been dumping into the 457b before the Roth IRA, is that correct?
Thank you!
Welcome @Bismi!
I’m quite sure that the tax break for the 457 falls under the same limit as that of the 403b. i.e. you can deduct a total of $19,500/year for any employer sponsored retirement account. So even though your employer offers both, it’s likely simplest to just pick one and go with it. They’re very similar, although 457 is slightly more flexible on withdrawals. So the 457 would also be steps 1 and 4, but you would just choose one or the other. Doesn’t really make sense to have both.
Thanks for your response! Yes 457b is more flexible when it comes to withdrawal so I opt to put in there. So it seems like I need to open a roth IRA before continuing to contribute to my 457b! Thank you!!
Does it make sense to have both of you are maxing out both. It was my understanding that those able to contribute to a 457 can do the max $19,500 on top of the 401k $19,500 max.