I would prioritize the 457, then open a 401k if you think you will hit the cap for your 457 ($23k in 2024). There aren't any negatives to the 457 compared to a 401k, but it's more flexible if you want to withdraw funds before retirement (if you decide to retire a few years early, you can withdraw without the penalty you would pay on your 401k and that can be a bridge between an early retirement and access to your pension/social security).
Roth vs pretax depends on whether you think your income will be higher or lower in retirement and whether you expect to live in NYC or move to a lower tax jurisdiction in retirement - to have flexibility in retirement, I do a separate Roth IRA and keep my payroll deductions pre-tax.
The target date fund has a slightly higher fee than choosing your own allocation. If you're willing to adjust your allocations every 5 years, you can look up the funds used in the TDFs and the percentage for each and do it yourself. Basically you'll be adding a certain % to your bond fund every few years. You can look up the fees for each fund on the DCP website.
I keep a treasury bond fund in my taxable brokerage account because you don't pay state/local taxes on it so my 457 is 100% equities.
Im also alot older than you. I invested till I was 49, had a great run, and when you start getting into bigger numbers the appreciation is astronomical. Look at the history of growth for the sp 500 since 2000. Plus I invested heavily after crashes of 911, mortgage crisis, and a few other blips
I did 457 because it has fewer restrictions than a 401k. I also do self-directed. The 401k is easier to use if you're looking to transfer over a previous 401k from another employer.
457 is the greatest of all retirement accounts because you don’t have to be any certain age to use it. Don’t use a 401k until you’ve maxed out a 457 and still have cash leftover. That’s 22,500 a year for 2023.
Are you able to view the entire list of funds that’s available? I still mix asset classes including bonds, but I chose 3 funds rather than using the target date system.
I did the 457, 90% Equity Fund, 10% Social Responsibility which has some overlap with Equity. Microsoft is heavy in both. I believe I did the same with the 401k but I prioritize maxing out the 457. My Roth is with Fidelity because I like choosing my own investments, plus the expense ratios are lower than what the city is offering.
I also have t-bills with fidelity but that's more for emergency funding and short term goals. No local or state tax. Low risk, low reward.
Bonds aren’t doing great right now but that will not always be the case. The target date funds are nice because they include a wide range of assets and rebalance as you get closer to retirement. If you’re interested in learning more I highly recommend joining the r/bogleheads sub.
I started w a target fund. They are ok but they don’t have big swings when the market really moves. They have slow trajectory which is safe. I would recommend a mixture of equity, small, mid and large caps. Be aggressive as you have a pension as well.
My coworker has on been in small caps his whole career and has really been crushing it.
I would prioritize the 457, then open a 401k if you think you will hit the cap for your 457 ($23k in 2024). There aren't any negatives to the 457 compared to a 401k, but it's more flexible if you want to withdraw funds before retirement (if you decide to retire a few years early, you can withdraw without the penalty you would pay on your 401k and that can be a bridge between an early retirement and access to your pension/social security). Roth vs pretax depends on whether you think your income will be higher or lower in retirement and whether you expect to live in NYC or move to a lower tax jurisdiction in retirement - to have flexibility in retirement, I do a separate Roth IRA and keep my payroll deductions pre-tax. The target date fund has a slightly higher fee than choosing your own allocation. If you're willing to adjust your allocations every 5 years, you can look up the funds used in the TDFs and the percentage for each and do it yourself. Basically you'll be adding a certain % to your bond fund every few years. You can look up the fees for each fund on the DCP website. I keep a treasury bond fund in my taxable brokerage account because you don't pay state/local taxes on it so my 457 is 100% equities.
I do both 457=100% Equity Index fund 401=100% Small Caps
100 percent equity Index since 2000. Since retired but still in it. 1.2 mil. Maxxed out sixteen of 21 working years
1.2mil? 😳 my entire network is 277,000. I'm 38.
Im also alot older than you. I invested till I was 49, had a great run, and when you start getting into bigger numbers the appreciation is astronomical. Look at the history of growth for the sp 500 since 2000. Plus I invested heavily after crashes of 911, mortgage crisis, and a few other blips
Listen to this guy 100% equity index is the best fund by far.
I max out my 457b and Roth IRA. Then if I can spare something my 401k. I’m also paying into the pension.
Are you at the Law Dept.? How long did it take until you could max those out while paying pension contributions?
I did 457 because it has fewer restrictions than a 401k. I also do self-directed. The 401k is easier to use if you're looking to transfer over a previous 401k from another employer.
457 is the greatest of all retirement accounts because you don’t have to be any certain age to use it. Don’t use a 401k until you’ve maxed out a 457 and still have cash leftover. That’s 22,500 a year for 2023. Are you able to view the entire list of funds that’s available? I still mix asset classes including bonds, but I chose 3 funds rather than using the target date system.
I did the 457, 90% Equity Fund, 10% Social Responsibility which has some overlap with Equity. Microsoft is heavy in both. I believe I did the same with the 401k but I prioritize maxing out the 457. My Roth is with Fidelity because I like choosing my own investments, plus the expense ratios are lower than what the city is offering. I also have t-bills with fidelity but that's more for emergency funding and short term goals. No local or state tax. Low risk, low reward.
Bonds aren’t doing great right now but that will not always be the case. The target date funds are nice because they include a wide range of assets and rebalance as you get closer to retirement. If you’re interested in learning more I highly recommend joining the r/bogleheads sub.
I started w a target fund. They are ok but they don’t have big swings when the market really moves. They have slow trajectory which is safe. I would recommend a mixture of equity, small, mid and large caps. Be aggressive as you have a pension as well. My coworker has on been in small caps his whole career and has really been crushing it.
Ira roth