Originally Posted by csandste
I grew up with a grandfather who told me to save my money 'cause the Depression was coming back.
I saved everything I could into deferred instruments IRA and a 457 plan. Almost half of my take home pay. I did move my IRA money to a Roth when they became available.
My situation was made worse because I was taxed as married until I retired, then widowed. I've been retired for eight years (as of last year), and my required minimum distribution has pushed my state and local taxes to more than double the state and local taxes I paid in my last year of working in 2010, plus I'm paying a lot more on additional Medicare payments. I have pushed some distributions from my IRA over and above my RMD into my Roth, so I'm paying a bit more now, so I pay less in my RMD later.
My money did grow tax free, and crunching numbers comparing the 457 deferral with just paying the capital gains is beyond me, since it's all water under the bridge, but I have talked to a number of retirees who have also regretted sticking the max into a 401k/403b/457 and getting huge tax increases in retirement. Mine's probably worse because of my change in marital status.
401k's are a lot cheaper than 403b's and 457's as far as expenses, primarily because there's a lot of competition. I transferred my 457 into my IRA as soon as I retired. Lot's of my fellow employees just kept their retirement funds parked where they were when they hit retirement. Big mistake because 457's had tons of hidden fees, I expect that 403b's because they're insurance products are even worse. You can't beat cheap-- i.e. Fidelity, Vanguard or Schwab indexes.
I thought a 403b was just the non-profit version of a 401k ?
Update- found this- " Once also known as tax-sheltered annuities, 403(b) plans used to be restricted to an annuity format. This restriction was removed in 1974."
When I worked for a large non-profit, they could only offer the 403b, but that was in the 1990's so way after the tax laws changed.
https://www.investopedia.com/ask/answers/100314/what-difference-between-401k-plan-and-403b-plan.asp