I would never use a non gov 457b and don’t use mine. It’s an unnecessary risk. I can easily achieve (have achieved) FI without it. I know others do and feel the odds (gods?) favor them.
A large number of community hospitals are at the brink of insolvency, or were until Obamacare saved them. It’s easy to forget how dire health care finances were in the Great Recession. Did you examine your organization’s finances at that time? I examined ours, and it wasn’t pretty. Margins went from 12% to 3% and our bond rating dropped three notches. We laid off ten percent of our work force , and some physicians, while not strictly terminated, were let go through contract non renewals. My institution is larger and has a much longer history than yours.
If Obamacare is repealed or Medi/Medi are substantially reformed to block grants or individual stipends, neither of which is out of the question if Republicans win the 2020 election, all bets are off.
Certainly consolidation rather than closure will be the rule, and the odds of forfeiture are low. But a wise rule of investing (and life) is to take no unnecessary risk which isn’t compensated. In your case, the compensation is minimal barring early retirement or some other period of prolonged and substantially lower income, because you will remain in the highest tax bracket otherwise.
The real question is why you are using a Roth account . If you’re searching out more tax deferral in the form of a non gov 457b, why not take the easy one in the form of the 401k?
1. Are you aware of any health care organization's 457b plans being taken by creditors? I understand that it could happen, but have you ever heard of a single instance. Even with the tough times your organization went through, did people lose their 457b plans?
2. I don't understand why you think the risk is uncompensated. The tax benefits can be quite significant. The money is not taxed going in. It grows tax free. And at retirement, you will presumably withdraw from this account exclusively until it is exhausted. So odds are you will be taxed at a lower rate than when you were earning. That's a lot of tax savings. When weighed against something that is extremely rare (losing the 457b), it seems more than sufficiently compensated.
Most of these tax savings will not be achieved if you leave the organization and go work somewhere else prior to retirement. So the likelihood of that happening should definitely play a role in the decision. However, even if that happens (which in OP's case is a consideration given his age, but it is definitely less of a concern in many other cases) it seems the rate of these plans being lost is so low, that it is generally probably worth it.
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