Deferred Comp or IRA

[BoJackUSMC]

Dear LEO members

what kind of retirement plan did you guys make during your law enforcement career? I have been told by many that deferred comp from Nationwide is very good place to start.

Anyone in here have any experience with Nationwide deferred comp? I am either debating between Traditional IRA from my local bank vs Nationwide Deferred Comp.

Thank you so much for your help.

[Falconis]

Look into a roth as well. I had all 3 at one point for some reason. But invest and invest early so u don't miss it.

[Cnynrat]

Not a LEO, so you can tell me to bug off if you want to.

If you think income taxes will be higher in your retirement, a Roth type account has some advantages. Aside from the fact that you never pay any taxes on withdrawals from a Roth account, you also have more flexibility in terms of when you must withdraw the money. I assume you would be eligible to invest in a Roth IRA. I'd probably do that before I invested in a traditional IRA. I'd be in a Roth 401k if my employer had one, unfortunately they do not.

If you decide to get into an IRA (Roth or traditional), you probably would have more investment choices in a brokerage account (Fidelity, Schwab, or ???) compared to a bank. I'd recommend a pretty basic allocation strategy using low cost funds.

And yes, the most important thing is to start saving for retirement early and often.

[Petro6golf]

I use the Nationwide deferred comp. Ive been an LEO for about a year and put away about $200 a month. Its pre tax so the $200 I put into the account is really like $80 out of my check. I dont even miss it. Every time I get a raise I put more in. So far I have about $1500 ish in my account. I was told you can borrow against your self so if you ever need the money you can take it out and pay it back. My reccomendation is get the Nationwide account and go to Fidelity or another major broker and start a Roth IRA. The sooner the better

[9mmepiphany]

Assuming you mean a 457a deferred comp account, that is the way to go. Start early and keep increasing your donation until you max it out...and go agressive

The advantage of a deferred comp account (we had ours through Fidelity) is that your donation is pre-tax. That means that it cost you less for the amount you put in and it lowers you taxable income at the same time.

I know co-workers who didn't overspend when they first got hired and figured out how to live on their base salary. The deposited all their raises (back when we got them) into deferred comp and had over $1mil when they were close to retirement...they worked OT when they needed extra money

[BoJackUSMC]

Thank you all for your help and your time.. I am going to meet my Nationwide Representative this Tuesday.

[hitman13]

What's you avatar from? Always wondered...

[Sacmedic]

Deferred comp, all the way. Roth on top of it if you can swing the dough. Go aggressive early, you've got plenty of time.

[CapnHawk]

Definitely Deferred Comp. I started putting away the max every month when it started in the early 1980's and invested agressively until my final few years on the Department. When I retired at 33 years service, I had over one million in my account and that's not counting DROP funds, which I rolled over into Deferred Comp.

[BoJackUSMC]

Once again thank you so much for all your help..
Try to put much money as possible and invest aggressively

[Falconis]

I was on my cell phone earlier, so it was hard to type.

YES with the deferred comp and try to max that out.

After I met with my G/F she got me into a ROTH account and a traditional IRA after a particular year's tax return went well for me. I ended up dumping a lot of my overtime into both those accounts after my DC. My order of importance was DC, ROTH, then TI. There are limits to all 3 I believe. I know there are with the first 2.

If you want a roadmap of what I did, send me a PM and you can decide from there. I am kind of happy on how things turned out. Even with the dot com and real estate busts. I kept buying during those times and left my money alone. Eventually they all went back up and I was able to do other things after I recouped with a bit of profit.

[mixicus]

Saving=GOOD. OK that was the easy answer. Now where to put your money???

When looking between your deferred comp and an outside IRA/Roth IRA. Consider the investment options. Meaning if the DC has limited or low performing options, an outside IRA/Roth maybe provide better return over the long haul. If you do consider an outside account take a look outside your bank/credit union at companies such as Fidelity or T.Rowe Price or other reputable companies in this space. They likely have greater options. The DC will likely be the simplest as your agency will probably have a direct deposit already set with Nationwide.

As for DC, IRA or Roth much comes down to tax status of the funds. Also keep in mind you can have multiple accounts. So after you start getting the big checks, you may hit your contribution limit. Should that 'good' problem happen, you can always start another type of account.

[TrailerparkTrash]

Deferred comp. The county gives you "FREE MONEY" up to a certain percentage. It's higher than any interest you'll get elsewhere. Then again, I too am "maxed out" on my deferred comp every year and the rest of my money goes into Roth IRA's.

[rolncode3]

We don't get a choice where our deferred comp (457B) goes. We have Fidelity. I dump $300/paycheck in there. No County matching.

But I don't own a home, so...

[9mmepiphany]

We don't get a choice where our deferred comp (457B) goes. We have Fidelity.

That's odd, we had Fidelity and had a choice between about 20 mutual funds and a couple of money market accounts