r/FinancialPlanning • u/SmokeSkilletsNotPot • 16h ago
Maximize Underperforming 457B or increase personal investments?
I'm a public sector (gov) employee in a fairly stable career/role. For the last year or two, I've maxed out my contributions to my 457B deferred compensation plan; my employer doesn't offer any match, so it's purely for the tax advantages. As I max this out, it's definitely causing a decrease in my other investments.
My 457B is locked into several investments managed by our retirement org; on balance, the portfolio's percentage growth has been roughly half that of my post-tax personal investments (mostly US ETFs). Roughly, 15% annual growth of the 457b vs 30% other investments.
Setting aside the uncertainty of the future and what that means for markets, assuming the returns stay roughly proportional: are the tax advantages of a 457B sufficient to justify contributing so heavily to an underperforming portfolio?