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Front Loading 457

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  • Front Loading 457

    I’ve been thinking about front loading the $18K I put in my retirement account in 2018 instead of putting in $1500 a month. The human resources person at my hospital said no one has ever done this before, but it would not cause any problems with the employer match. The match will still be spread out over the year.
    Do others on here front load their retirement accounts each year? I was surprised that none of the other 3,000 employees at my hospital have done this, so i guess I’m looking for a little validation.

  • #2
    I did this last year when I knew that I was leaving a position that had a 457 for one that did not.  The match did not continue to be spread out; I would confirm this before doing it.  Other than potentially losing the match, I can't see any other reason not to do it.  That said, you're not losing much by spreading out your contributions to guarantee that you get the match.


    • #3
      If you lose the match then no. Otherwise time in the market is better.


      • #4
        I do this every year


        • #5
          i've done it in the past.  we also do not get a penalty for front loading either 457 or 403.  there are many physicians who do it here.

          i have lost some enthusiasm for doing it over the years, but don't really have a logical explanation.  it worked out poorly in 2008.



          • #6
            I front load -- wrote an article about it, of course.

            I don't get any match in the 457(b), so there are no issues there.

            Before front-loading the 401(k), I asked if doing so would affect the company match. HR said no. HR was wrong. The match stopped coming in February when it was only about 15% complete. The rest of the match (~$5,000) was eventually granted as a true-up the following spring. You can also front-load an HSA, 529, whatever you can afford.

            If 2018 turns out to be a negative year for the market, we'll wish we hadn't front-loaded, but most years the math is in our favor.


            • #7
              I worry about the HR guy being wrong and it screwing up my match, so thanks for sharing your experience, POF. Front loading the 529s seems better since I have complete control over that.


              • #8
                Not really a match; but scheduled contribution from the employer (like Kaiser does) vs VA where this would go wrong.

                With any bolus injection; cost averaging is gone -- for better or worse.  If market rises 15% -- yipee!;  if it tanks 20% the next day from [choose your crises]....not so good.

                I believe the reason is much more basic -- docs are set and forget type investing folk and don't bother to manage actively like this.


                • #9
                  We front load everything we can: in our case that is two 403bs, two backdoor Roth IRAs, and our 529s (front loaded early in childhood as opposed to each year). I don't use my non-governmental 457b, and I'm not permitted to front load my HSA.

                  Company match to 403b and employer HSA contributions are every two weeks regardless of our activitiy.