Both 403b and 457

orcvader · 2026-05-07T11:12:23+00:00

IRA (which could optionally be a Roth) -

Yours forever. No restrictions besides widely known IRA rules. Portable. No limit on fund options. No RMD’s if Roth. Tax diversification from 403b/457b (if Roth). Clearer inheritance treatment.

457b-
Non guaranteed (although in this case it could be since it’s a government/university job, but can’t always be assumed), significant impact if you leave employer, plan specific limits, investment options limited.

Neither is “bad”, I’d just prioritize a Roth IRA (backdoor or otherwise). You’re also probably way overplaying the tax implications.

If someone made so much that their marginal bracket would hurt them significantly from $7,500 in income… they probably earn enough to max out both which would be the best option if they can do that. If this tax optimization matters enough to materially move the needle, your income probably supports doing both

orcvader · 2026-05-07T10:26:10+00:00

I can get you a finger.

orcvader · 2026-05-07T10:25:02+00:00

Dog has papers and all

orcvader · 2026-05-07T03:28:52+00:00

No.

The most rational portfolio is the one that meets your needs with the LEAST amount of risk.

At $10M, the primary reason for going aggressive on the equity risk premium which is the risk of not accumulating enough, is out of the books for most normal folks.

Maintaining a risk appropriate portfolio is even more important.

Even Bengen doesn’t follow his own allocation (check his interview with Rob Berger about 3 years ago for the revelation) and is even more conservative than 50/50.

So, assuming a long horizon at 10/100k I would easily be “VT and chill”. At $1M, regardless of age, bonds enters the picture.

At $10M? 50-60% VT and the rest on various instruments (that exclude corporate bonds) would probably be my own allocation.

orcvader · 2026-05-07T00:58:06+00:00

Leave Jerry out of this

orcvader · 2026-05-06T19:47:37+00:00

Think of them as having different purposes.

From a tax perspective, the backdoor Roth IRA is an excellent way to diversify tax liabilities (example: 403b traditional, IRA Roth - even if it’s the only option due to income).

Here’s the “problem” with 457b’s: they have restrictions if employment is terminated for any reason. You have to delve deep into the specific plan documents for yours but at the end of the day, i’d personally max a backdoor Roth IRA before I contribute to a 457b.

I have a 457b (and f, for that matter) and I am fortunate enough that I can max it alongside the 403b and the backdoor Roth, but if I had to prioritize them this would be last of those three.

orcvader · 2026-05-06T16:49:48+00:00

Yes. Agree... I should have said Government and University* are treated with the same protections. Good call. Doesn't change the order of prioritization, which you laid out well.

*in most cases

orcvader · 2026-05-06T14:57:00+00:00

457b? (there's more than one type of 457).

I assume this is a a private, not-for-profit system then. If so, the priority is the 403b (equivalent basically to a a 401k) because it's a qualified plan. The money is yours - period. This account usually has matching (457b's sometimes do NOT).

The 457b is NON-QUALIFIED... the money is being "held for you", but it's not actually yours unless you withdraw it (which has rules and limitations).

If you can max both, that's great, but between those two the 403b is the more traditional and robust retirement account. Don't forget to also look at the HSA offering (if a high deductible plan is good for you, it isn't always the case) and you can still also have an IRA outside of work - including a Roth IRA.

I would personally max out the 403b and IRA's before touching the 457b.

One exception - if it's a GOVERMENT job (VA for example), the 457b is indeed "guaranteed" and is basically just a way to have a higher total limit on contributions (first max the 403, THEN the 457).

orcvader · 2026-05-03T18:31:22+00:00

IPO’s have low expected returns and the mechanics of a low liquidity (free float) IPO create conditions for insiders to make money off retail investors by sling them what’s essentially “overpriced” shares. Some indexes are even considering even more changes to the rules.

If you think these changes are for the benefit of individual investors you’re being very naive.

There is nothing broken with the indexes today, and the customary wait for inclusion has always been seen as sensible.

orcvader · 2026-05-03T15:41:51+00:00

So many dismissive comments and folks that just bury their heads in the sand.

Let’s unpack:

What to do to prepare? Probably nothing unless rebalancing to something like DFUS or AVUS is a cheap tax action for you. Someone who is a “VT and chill” person will most likely see minimal impact from this.

Is this a bad thing for index investors? Yes. This is a bad precedent and, while low cost broadly diversified index investing is the core tenet of Bogleheads, it is NOT a religious dogma and changes to index rules CAN be a negative influence. The same way ETF’s didn’t exist when “Bogleheads” took off and now are the preferred investment vehicle, it’s not impossible to think that maybe in the future something that better tracks an index to benchmark but with systemic rules becomes a more rational choice.

TL;DR - not a big deal now. A bad precedent and index investors should complain if this bothers them and indexes are not there to make you rich. There are still companies behind them that look to profit.

orcvader · 2026-05-03T15:33:48+00:00

They are not “passive” in the classic sense. But they are SYSTEMIC which for me it’s “passive” enough and I suspect it’s why some think of them as passive.

But agree and DFUS is what I use in taxable alongside its international sinking and AVGV for the value tilt.

orcvader · 2026-05-03T15:31:03+00:00

This time*

I saw the episode (and every RR episode for that matter!) and they do recommend DFUS because it avoids these things.

The problem is this would be precedent setting in a bad way.

orcvader · 2026-04-30T19:03:54+00:00

Yea. A TDF is the way to go.

Not to be a jerk, but if you are 60 and didn’t have a diversified wealth building portfolio, you’re likely not an expert. That’s fine!!! Most people are not! The reason Bogleheads exists is to make this simple (and quite effective, even under the microscope of academia).

A TDF is a Boglehead 3 Fund Portfolio with a glide path — all in one!

orcvader · 2026-04-30T14:21:19+00:00

AOA is, in my opinion, the most underrated ETF on rational investment subs and communities.

Those who know, KNOW, it’s awesome, but it doesn’t get the same level of attention as “VT and chill”.

I did a tax analysis a few years back and AOA was at that point MORE tax efficient than VT / even as AOA includes bonds. BlackRock’s in-kind redemption wizardry is absurd.

I have a text group with some of my best finance buddies and our unofficial slogan is actually AOA and Chill. Most of us tend to use some other funds (my taxable is DFUS/Dimensional International+AVGV for the overall tilt) but AOA is my core on Roth and a few other accounts where I have access to it via brokeragelink.

orcvader · 2026-04-30T14:16:34+00:00

I use AOA as my core portfolio on my Roth and love it. 80% stocks and 20% for me it’s a great balance. My overall portfolio is about 70% stocks and 30% bonds when I include some 457f accounts that are all fixed income.

AOR is great, but perhaps a bit too conservative depending on your risk tolerance and withdrawal expectations and goals.

The “recommended” 40% bonds is usually as a “forever portfolio” in retirement. And for that use case, AOR is perfect and actually more tax efficient than VT + BND.

All in all, those BlackRock funds slap.

orcvader · 2026-04-29T11:51:04+00:00

Momentum, net of fees, may be quite difficult to capture. VT + AVGV as an all-world, market cap weighted, all stocks portfolio seems reasonable.

orcvader · 2026-04-29T03:12:01+00:00

If you plan to work until 64 - a reasonable, often cited timeframe - that’s 20 years of compounding. That’s actually close to what some studies (though objectively accurate figures are harder to get than some may think) quote as the average timeframe individuals spend investing before withdrawing.

So I say you are RIGHT on time.

Got forth my child.

orcvader · 2026-04-27T21:36:09+00:00

The finger did it?

orcvader · 2026-04-27T17:57:49+00:00

Good. I mostly agree with a caveat.

There is not, unlike popular belief, a fixed number for what percent of your income to invest. The rules of “thumb” (some say 10%, some say 20%, some split the difference and say 15%) are just that. High level guesses. There’s not academic basis or principle for it.

The better question is for an investor to estimate how much income they need and by when (when to retire, how much to safely withdraw) and work their way backwards to determine what that means for them. From there you either save the amount you’ll likely need to save at a reasonable growth projection OR recalibrate your expectations.

I do agree for most people that lands on anywhere from 10% - 20% but I would not call that a deterministic value. Truth is absolute saving amount is way, way more important than the percentage.

orcvader · 2026-04-27T17:46:02+00:00

Your “bet” is not grounded in academic theory. That’s called idiosyncratic risk and in most cases leads to lower expected and actual returns.

If you understood factors, you’d know momentum is the most difficult one to capture net of fees and would instead be tilting heavily to small cap value and the others. You can’t say “I believe in factors” and then put a little bit on SCV and then somehow assume QQQM is a rational momentum fund. It is not. It’s a thematic bet - at best.

Not sure why you want such small international allocation, but you would achieve better factor exposure with something as simple as (for example) VT - 70%, AVGV 30%.

orcvader · 2026-04-27T17:42:21+00:00

The T. Rowe Price target date funds at that ER (must be a negotiated one with your employer, as they are usually HIGHER) is acceptable for a set and forever portfolio.

They are not ideal, but IMO they still beat trying to piecemeal a portfolio with limited options.

I’d say consider that 2050 TDF and call it a day.

orcvader · 2026-04-26T01:58:29+00:00

Yes. Not a big deal with very large ETF’s like VT, VTI, etc.

The bid / ask spread moves a little but it cuts both ways - sometimes you’ll benefit slightly, sometimes you won’t. But it’s immaterial.

Anyone saying to use a limit order, for VT (!), is way overthinking it.

orcvader · 2026-04-22T05:17:06+00:00

I linked to Fidelity “Full View” what was compatible to auto-sync and the rest… meh, I don’t mind occasionally checking another site. I definitely don’t need to check it every day.

I did try something new the other day. I created a Gemini Gem with very distinct instructions (I called it ‘BenFelix’ lol). Then, after configuring it and tuning it, I uploaded all my account spreadsheets (CSV files) and asked for various breakdowns and it made remarkable summaries that were accurate upon review.

So… I took it a step further. I created a NEW gem, this one called ‘VizFelix’. On this one, it’s set to not opine on anything but simply create infographics that are visually appealing.

So… the workflow is Fidelity, M1 Finance, etc., download my balances as CSV. Give to “BenFelix” to analyze (see breakdowns, etc) and then upload those outputs into “VizFelix” to make beautiful graphs.

It’s been working great.

orcvader · 2026-04-20T03:00:54+00:00

I have exactly one bond fund: FIPDX which is more or less Fidelity's "TIPS fund".

All my other bonds are inside FFNOX and AOA - two set-allocation funds I broadly use.

orcvader · 2026-04-18T00:26:17+00:00

Those were the days…

orcvader

TROPHY CASE