My employer allows me to invest in the 457 plan. The employer matches a small portion of my investment. (this is very good--free money). The plan is run by the ICMA Retirement Corp.. I'm still trying to figure out the fee structure for the 457 plan. Should I take 1/2 of my monthly investment and place it in a 401k plan?, or is it allowed? I really do not know the difference between the two plans, except for the free boost from the employer.
Beginning in January of 2002 the main differences between 457 and 401ks will go away. Both plans will allow you to contribute up to $11,000 per year on a pre tax basis. It used to be 457 money could not be rolled over to IRAs but that will change a swell. I would contribute to the plan that has the employer contributions first. If the plans both have the same investment choices, I would just stick with one of them. Otherwise go where the choices have the lowest expenses.Currently a 401k offers a little more protection in case you have creditors trying to claim your assets. Take advantage of the employer money first.Bill
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