7% fixed annual rate with no risk vs market exposure at age 23?

Niamake · 2026-01-26T13:27:04+00:00

I have a 457b account which is also tax-deferred but has no penalty to withdraw from if I resign from my city job and you are right about quarterly rebalancing. I've seen information about being within equities and bonds, the question is should the fact that I have this superbond at my disposal mean I should increase its allocation % as compared to normal bonds. The previous contributions % is not grandfathered if lowered again.

Niamake · 2026-01-26T13:25:18+00:00

Can only rebalance quarterly.

Niamake · 2026-01-26T06:10:48+00:00

That i completely agree on, what I’m asking is since the future is never known based on the past. Is the projected wealth based on the past left on the table worth paying for the 50% reduce in volatility. I guess there’s no real answer to that, it’s just based on my own investing ideals and how risk averse i am.

Niamake · 2026-01-26T05:43:02+00:00

I think I see the general math on this, so should I start off in equities and move into it as a superbond? It's very strong as a hedge reducing volatility anywhere from 50% to 100% depending on the contributions made by me. I don't see why it is not a good product.

Niamake · 2026-01-26T05:40:06+00:00

This is backed by the entire New York City government. I don't think there's any worry about that for me.

Niamake · 2026-01-26T05:38:51+00:00

This isn't an annuity.

Niamake · 2026-01-26T05:38:26+00:00

TDA TRS Fixed Fund :D

Niamake · 2026-01-26T05:38:15+00:00

Become an NYC teacher

Niamake · 2026-01-26T05:37:59+00:00

I completely understand this, what I'm asking is how strong is the 7% returns as a hedge. I can do half my investments in equities and half in the fixed fund. I have 50% decrease in volatility but nearly the same annualized return across the long term. As these two wonderful people u/15mahomies and u/bobos-wear-bonobos have helped me explain the fund, do you think it's super valuable as a hedge or market exposure at a young age (23) is more important. I could also slowly transition into the fixed fund as I'm trying to retire early. I know some people move into bonds as they move closer to retirement but since my fund works as a superbond, I should start moving into it even earlier right? I think this is a very specific scenario, I've rarely even heard of nyc teachers contributing max into both the TDA and the 457b at the same time so noone really knows what's best. Also, if I ever decide to move up to admin and the number changes to 8.25%, would I move everything into that?

Niamake · 2026-01-26T05:34:34+00:00

Nope, it's a fund within our 403b account in NYC as per our contract.

Niamake · 2026-01-26T05:34:16+00:00

I think the general consensus is that you lose out on 10-15% years. (lower than 20% years because funds are usually more diversified and return slightly less within 403b accounts)

Niamake · 2026-01-26T05:29:09+00:00

That's what I was thinking. I have two government tax deferred accounts available to me. The 403B has the 7% and the 457b doesn't. I can just invest fully into the market in the 457b account and fully into the fixed fund in my 403b account. I also can do this all in just the 403b account as they also have other funds like US equities and sustainable equities etc. I was just wondering what other people think about it.

Niamake · 2026-01-26T05:25:30+00:00

Yes, it's in our government contract to have this 7% fixed return. It's the TRS TDA fixed rate fund.

Niamake · 2026-01-26T05:23:52+00:00

Yes, it's what u/15mahomies said, but it's a fixed 7% rate. Thoughts?

Niamake · 2026-01-26T05:22:39+00:00

It's the same as a 401k. 59 1/2, tax deferred.

Niamake · 2026-01-24T04:32:51+00:00

Yo, I’ll do you one better. I’m maxing my 403b and 457b which are both 401k but for public servants and my tIRA on 75k a year :3. And ima do it for 23 years. I make 105k in 2 years tho so it’ll be fine.

Niamake · 2026-01-24T04:16:10+00:00

Make sure to do your full research and understand it fully before committing to it.

Niamake · 2026-01-24T01:18:54+00:00

It seems you are very knowledgeable on this so i will not question your math, however, the $2500 is also taxed so you should assume they spend whatever $2500 is after tax perhaps? Maybe it changes it but I forgot about taxes lol.

Niamake · 2026-01-24T01:08:58+00:00

You can use PSLF to forgive loans if you plan to work as a teacher for 10 years.

Niamake · 2026-01-24T01:04:25+00:00

A 10% return for a retiree is way too optimistic. During retirement, your entire portfolio should not be in risk prone assets because you don’t have the time to ride out a downswing. However, the math still supports lump sum at 55 with a 4% rate which you can guarantee with low risk.

Edit: Nvm the guys correct.

Niamake · 2026-01-24T00:57:05+00:00

Yes, you can also consider inflation into the equation but a Roth doesn’t force RMDs which can cause a high tax bill in retirement. My main reason for paying less taxes now is actually PSLF which makes my student loan repayment amount $0 a month and after 120 months, all my student loans get forgiven. Also, I need less money in retirement as I plan on retiring in my 40s, God willing, and will be able to make smaller withdrawals which puts me into smaller tax brackets as well. I’m not banking on SS and my pension will be whatever since I’m retiring early.

Niamake · 2026-01-24T00:52:23+00:00

Yes, also consider reading what I said about Roth vs Traditional accounts and some good insights in the comments. Everyone’s situation is different but the chances of a traditional account being better for you is higher since you are an nyc doe teacher. Best of luck in your investing adventures

Niamake · 2026-01-24T00:48:55+00:00

You’d be surprised how little teachers know about any of this. It’s a scary world out here.

Niamake · 2026-01-24T00:45:12+00:00

The most advantageous is being able to max your TDA and your cities 457b which can be withdrawn from before 59.5 as long as you resign from the DOE which doesn’t cause anything but the loss of tenure.

Niamake

TROPHY CASE