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I am fortunate to have as part of my employment a deferred compensation plan in addition to the County sponsored/required pension. The pension is a mandatory 5% per pay, the 457 deferred compensation plan has a contribution ceiling of $7,500 per year (I think). I have also been using the payroll deduction plan for savings bonds.
With the pension, the 457 and the bonds, I am saving approx. 10.5% of gross pay per annum. I am planning on using the increase in my salary in 1999 to increase the amount I send to the 457.

I have had some trouble deciding how to allocate the money in the 457's available funds. I have searched the names of the funds as listed in the statements from the Hartford, the plan manager, but have not been able to find information on all of them.
I have money going in equal amounts into Janus 20 and American Century: Twentieth Century Ultra. The plan also offers a general fixed rate account, to which I send a small portion of the money (20%). My other choices include Hartford Index fund, and other various Hartford and other accounts, divided into growth or growth and income.

1. Should I send all the funds to one account, or continue to divide up the money?
2. Should I ditch the savings bonds and plow that money into the 457? (I suspect I will since the income is deferred for the 457 contributions and the savings bonds are bought with post-tax dollars).
3. Should I forgo the 457's general fixed rate account which is currently paying 6.05% and put all the money into one or more funds?

I am 40 years old, and will also in 15 years start paying for my daughter's college education. (which is where those savings bonds already purchased will probably go.) I am also beginning to invest in a few stocks as well, but am able to get more information on those items than I can find on many of the funds in the 457.

Thanks for any insight/advice.

Catharine
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Put $2000 a year in a Roth IRA. If that means you have to reduce your contributions to the 457 or the savings bonds, you will be better off. If you are married, put in $2000 for your spouse too.

Almost all 457 plans that I have heard of charge an extra 1% annually, which has the effect of reducing your total accumulation by about 20% over a period of several decades compared with what it could be in a Roth IRA.

Bill
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I agree with Bill. You are much better off funding your Roth IRA first. In my opinion, a 457 (and 401-K) plan are much better than U.S. Savings Bonds.
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Greetings, Catherine, and welcome. You wrote:

<<I am fortunate to have as part of my employment a deferred compensation plan in addition to the County sponsored/required pension. The pension is a mandatory 5% per pay, the 457 deferred compensation plan has a contribution ceiling of $7,500 per year (I think). I have also been using the payroll deduction plan for savings bonds.
With the pension, the 457 and the bonds, I am saving approx. 10.5% of gross pay per annum. I am planning on using the increase in my salary in 1999 to increase the amount I send to the 457. >>


The maximum allowable contribution to your 457 plan is $8K for both 1998 and 1999.

<<I have had some trouble deciding how to allocate the money in the 457's available funds. I have searched the names of the funds as listed in the statements from the Hartford, the plan manager, but have not been able to find information on all of them.
I have money going in equal amounts into Janus 20 and American Century: Twentieth Century Ultra. The plan also offers a general fixed rate account, to which I send a small portion of the money (20%). My other choices include Hartford Index fund, and other various Hartford and other accounts, divided into growth or growth and income. >>


From your description, I can't tell if the funds you're using are public funds or proprietary funds. If proprietary, the only information available will be that furnished by Hartford. They do, though, offer some public ones which can be searched through Value Line or Morningstar.

<<1. Should I send all the funds to one account, or continue to divide up the money?
2. Should I ditch the savings bonds and plow that money into the 457? (I suspect I will since the income is deferred for the 457 contributions and the savings bonds are bought with post-tax dollars).
3. Should I forgo the 457's general fixed rate account which is currently paying 6.05% and put all the money into one or more funds? >>


Only you can answer these questions based on your goals and willingness to take risks in the marketplace. If these funds are strictly for retirement that's 15 or more years away, then be assured the fixed rate fund and Series EE bonds won't build you a nest egg anywhere near what you would have with an index fund or even a reasonably well-run managed stock fund. Stocks entail risk, but that risk diminishes the longer you have to leave the funds at investment. You have to decide the level with which you're comfortable, and none of us can tell you that.

Regards….Pixy
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