I originally saved for retirement in a Roth IRA and 403b because that's what I was told to do when I started working. I have been looking at possible early retirement, so last year I started saving into a taxable brokerage.

I found out recently that the school district I work for offers a 457B, but I can not find anyone that has ever even heard of it. Supposedly it allows you to withdrawal from the account at whatever age you want without penalty, which sounds too good to be true. This would be a "governmental" 457b through a school district. It is not offered by my district through any of the major investment firms.

Does anyone have experience with this type of account? What are the disadvantages?

I have a little experience. The main disadvantages that I'm aware of are typically a limited menu of investment offerings and you generally don't have access while still employed.

Wife works for a school district and she has a Roth 457b. It's administered by TCG who I think administers similer plans for a lot of school districts in Texas.

Had no clue the typical age requirements don't apply.

I have one, we have two choices Nationwide and Mission square. Neither have a ton of choices and fees are bit on the high side but not terrible. The age requirements mentioned above are correct with the caveat that you have separated from the employer. Also, only the money you contribute is penalty free. If you were to roll something else in that money would still be subject to age.

Never looked into this, but probably opening one now. We already max a 403b for my wife, but could really use additional tax savings and there's some decent investment options so this looks like a winner!

My wife has one through Katy ISD administered through TCG. Plenty of investment options, but fees are high. Our plan has a ROTH option which we utilize. The math on the fees being paid vs just doing a brokerage account and paying capital gains taxes in the future are pretty close so it is not a "no brainer" choice.


My plan is to roll it all out to a ROTH IRA as soon as she retires to reduce the fees. One thing to note is that if you roll it out, then you are subject to the age restrictions of the IRA.

Holistic Planning said:

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One thing that is cool about 457 plans is it doesn't count against the annual maximum you can contribute to a plan. Do you could contribute 23.5k to a 457 and another 23.5 to a 401k plan for example.

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This is true and a great feature. I've used it…to an extent. Now I just need to find $47k a year that I won't miss, to take full advantage!