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Author: neuroness Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19372  
Subject: 457 ad nauseum Date: 5/7/2000 6:36 PM
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Greetings,

Well I'm back after doing a lot of research about 457 deferred comp plans. Bottom line: I wish I didn't have one, I think. Since my question was originally whether to continue to plunk down my $200/month into VALIC (not matched by my employer by the way) or take that money and invest in an index fund or directly into the stock market, I looked at Step 4 and tried to calculate that comparison. Then I realized that I had no idea how to figure out the rate of return on my fund allocation at VALIC, since they are subaccounts, not the real thing (that does make a difference doesn't it?). At any rate, even though I did select some ostensibly decent funds, I haven't made anything. Most of what is in my account is principal. Given the state of things in the market these days, how do I even make a valid comparison??
Granted I have only been contributing for 1 1/2 yrs but with only 10 years until retirement (hah!) I need to be somewhat aggressive. I do have some other sources for retirement income, a pension and a recent inheritance looking for a place to land, but I really need to make a decision about this deferred comp money.
Would I be better to put it into an IRA at this point? The yearly contribution would almost be the same...Any assistance would be greatly appreciated.

Thanks in advance, JoAnne
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3857 of 19372
Subject: Re: 457 ad nauseum Date: 5/8/2000 8:02 AM
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Joanne writes:

<<Well I'm back after doing a lot of research about 457 deferred comp plans. Bottom line: I wish I didn't have one, I think. Since my question was originally whether to continue to plunk down my $200/month into VALIC (not matched by my employer by the way) or take that money and invest in an index fund or directly into the stock market, I looked at Step 4 and tried to calculate that comparison. Then I realized that I had no idea how to figure out the rate of return on my fund allocation at VALIC, since they are subaccounts, not the real thing (that does make a difference doesn't it?). At any rate, even though I did select some ostensibly decent funds, I haven't made anything. Most of what is in my account is principal. Given the state of things in the market these days, how do I even make a valid comparison??
Granted I have only been contributing for 1 1/2 yrs but with only 10 years until retirement (hah!) I need to be somewhat aggressive. I do have some other sources for retirement income, a pension and a recent inheritance looking for a place to land, but I really need to make a decision about this deferred comp money.
Would I be better to put it into an IRA at this point? The yearly contribution would almost be the same...>>


No one here can answer your question with any degree of accuracy. Only you know in what you would invest, how much, and what the potential returns might be. Given your choice of investment company within the 457 plan, though, my guess (and that's all it is) is the wider latitude in cheaper vehicles coupled with a greater selection of those vehicles would argue against your 457 plan. At least for the first $2K in a Roth IRA, that is. But again, only you can answer that question.

Regards..Pixy

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