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Anyone ever really lost their NG 457?

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  • #16







    1) Ways to roll into pre tax .
    2) Ways to roll into post tax (Roth type).


    Non-government 457 plans can not be rolled over to an IRA or any other retirement plan except another non-government plan and then only if they accept (very few of which do).
    Click to expand...


    truth.

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    • #17
      I don't get the nongovernmental 457. There's pretty much nowhere to put it when you leave your job, so what's the point? The IRS might even get a bigger chunk than they would have if you had just put it in taxable. For me, not worth it.

      My (fiscally highly solvent) system loves to send us fancy letters telling us to invest in the 457. Funny, they don't send fancy letters telling me to invest in the 401k or 403b. Hmm.

       

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      • #18
        I googled my employers name followed by form 990 and the 2016 and  2017 fiscal year was available on ProPublica.

        Are NG 457b and 457f put in the same bucket for creditors, or does one go first? Would you be more weary of 457b if you were early in your career?

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        • #19
          For 11k In reduced take home you can invest 19k.  If your system is large and nationally ranked, has good investments and distribution options, seems like a good bet.  It can only help and won’t break your retirement,  if you leave, then set aside a portion of the account for taxes.  Not a big deal,  it’s also asset protected since it’s not yours.  The risk is minuscule compared to market risk and not ever using the money because your dead.

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          • #20
            Honestly, I was NOT trying to spook anybody about NPO 457b’s, that is not my style. I was simply answering the OP’s question. Of course, it can happen - we all know it is possible and not an urban legend, right? The occurrence is still far from likely, whether or not you know of a particular instance somebody is aware of - or not. Nothing has changed. My response should not affect anyone’s decision about whether or not to contribute to an NPO 457b and that was not my intent. I still recommend it to clients - the chance of your hospital going bankrupt continues to be minimal. Just do your due diligence.

            Having/contributin to an NPO 457b should not keep you up at night unless you become aware that your hospital has serious financial problems. Understand that you are going to pay tax on those contributions + income/growth at some point. Taking out the balance now versus 30 yrs into the future (when it is much larger), versus as a 5-yr drawdown at separation of service, or whatever (according to the rules your 457b is structured under) is more a timing issue than a critical loss of income issue. The tax hit to OP may be the same in the future - we really don’t know at this point. Keep your perspective.
            Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #21




              I know PoF has a 457b at his current gig. I would love to hear from him and others about what decision they made about the mechanics of withdrawal. I have to make an irrevocable distribution schedule whenever I separate from my employer. Currently the balance is between $100k and 150k. Hard to decide how to do it with little certainty of future income and tax rates.
              Click to expand...


              Are you planning on retiring in the current position or leaving for another job and being forced to take the distribution at that time?

              If you are retiring from the employer then taking distributions in more increments is more ideal, provided there are no underlying solvency issues.  Less tax implications for the withdrawal and for Roth conversions from a 401k (or similar account).  If you are leaving an employer but plan to work elsewhere I guess it depends on how long you plan on being apart from work, whether or not you're going to be full time moving forward, among other things.

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              • #22




                I don’t get the nongovernmental 457. There’s pretty much nowhere to put it when you leave your job, so what’s the point? The IRS might even get a bigger chunk than they would have if you had just put it in taxable. For me, not worth it.

                My (fiscally highly solvent) system loves to send us fancy letters telling us to invest in the 457. Funny, they don’t send fancy letters telling me to invest in the 401k or 403b. Hmm.

                 
                Click to expand...


                What's not to get?  It's just another tool in the toolbox with different rules.  If I worked in a highly solvent system I would be maxing out the 401k AND 457 yearly.  When I left I'd draw down as slow as I could but look to maximize after-tax wealth and transition to Roth/Taxable accounts as tax-efficiently as possible.

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                • #23
                  I plan on leaving and working elsewhere, but probably working a lot less than I do now. I'm not even sure I want to be employed again unless it is possible to find a nice part time job with health insurance.

                  Said organization is in pretty good fiscal health. I think I would try to space the withdrawals out into my 60s, when I would have to start considering RMDs and SS.

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                  • #24




                    I googled my employers name followed by form 990 and the 2016 and  2017 fiscal year was available on ProPublica.

                    Are NG 457b and 457f put in the same bucket for creditors, or does one go first? Would you be more weary of 457b if you were early in your career?
                    Click to expand...


                    Two different systems. The 457f is typically a rabbi trust, and insulated from the organization’s creditors.

                     

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                    • #25
                      That is brutal. I am shocked there was no coverage for that with a merger/buy out. If you had asked me, I would have thought Baptist was a strong institution.

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                      • #26
                        I'm just starting out - 4 years into practice.  I have not used 457b yet because I was working on school loans. Now that the loans are over, I'm really conflicted on this.  I can invest 19K in 457b or take out 13K to my taxable.  I have no other tax-protected spaces beyond 403b and BD-Roth (W2 earner).  So I gamble that the company is still here in 30 years? It seems very stable and it is a large national brand.  They still have a pension plan! But we all know it only takes a few years of fancy-type mismanagement to screw the pooch.

                        What to do?

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                        • #27
                          Larry, I believe the 457f money is still on the employer’s books and is not protected from creditors.

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                          • #28
                            I would use the 457b in your situation.

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                            • #29




                              I’m just starting out – 4 years into practice.  I have not used 457b yet because I was working on school loans. Now that the loans are over, I’m really conflicted on this.  I can invest 19K in 457b or take out 13K to my taxable.  I have no other tax-protected spaces beyond 403b and BD-Roth (W2 earner).  So I gamble that the company is still here in 30 years? It seems very stable and it is a large national brand.  They still have a pension plan! But we all know it only takes a few years of fancy-type mismanagement to screw the pooch.

                              What to do?
                              Click to expand...


                              The relevant piece you do not mention is the withdrawal options.

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                              • #30
                                https://www.beckershospitalreview.com/hospital-transactions-and-valuation/baylor-scott-white-memorial-hermann-end-merger-talks.html

                                Count me in the “not worth it” camp. I think the future for even big regional brands will be consolidation into huge health systems, and mergers like the above will always loom over a NG 457 contributor’s head. Surely a small hospital is much more likely to get acquired rather than declare bankruptcy? The main (very real) downside to the contributor would be premature distribution I would think

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