Dear Dave,

I’m single and a firefighter, and we have a pension plus a 457(b) retirement plan. I’m not contributing to the 457(b) right now, because I’m following your plan and in Baby Step 2, which is paying off debt. Our retirement plan is managed by a big life insurance company, but I know you don’t like the idea of using insurance companies when it comes to investing. Can you give me a little guidance?

- Dustin

Dear Dustin,

I’d max out a Roth IRA, which would be $6,000 a year in your case, before I did anything with the 457(b). That may not take you to the level I recommend - which is putting 15 percent of your income toward retirement- so then I’d investigate the options offered by the insurance company that’s managing your 457(b).

When you have a look at the options available to you within the 457(b), you’ll need to pay special attention to two things - the fees, this is where they’ll kill you, and the rates of return. If they are somehow accessing mutual funds, and you can get stock market-like rates of return - I’m talking about a 10 to 12 percent average over many years - then I’d put some in there.

Still, warning sirens in my head go off when I hear that a life insurance company is running a 457(b). Investing through a life insurance company is a bad idea 100 percent of the time. Now, is it a bad enough idea in this case to avoid it altogether? It may be an okay idea in this specific instance, but chances are it won’t be anything you’ll look at later and be blown away by great results.

That kind of thing just isn’t going to happen when you wrap an insurance company, or life insurance, around investing. I mean, you don’t go to a transmission shop to get your muffler fixed. It’s just not what they do.

- Dave

Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including "The Total Money Makeover." "The Dave Ramsey Show" is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey.