I have been examining the City of Chicago Deferred Compensation Plan offered via Nationwide. The plan document proved quite dense. Many more restrictions on access to and control over the money invested seem to exist that I am used to seeing. I am wondering whether such plans in general, and ideally this plan in specific, would be superior to simply taking money and putting it in an IRA with (for example) Vanguard. I am particularly concerned about hidden costs that would reduce returns in the long run.

An issue may occur where contributions in excess of the IRA contribution limit might be desirable. If I understand the situation, which I may well not, then under 457(e)(15), the current contribution for deferred compensation is $18,500. And the current IRA limit is $5500. Given that difference, perhaps establishing a relatively low deferred compensation account to keep that program in play, and also establishing an IRA to allow more versatility and control costs might be better. Would that be true? In that instance, the IRA could be maxed first, then any excess directed into deferred compensation. I assume there would be a maximum that is not $5500 plus $18500 (2018 figures).

I clearly don't understand this whole thing. Any pointers would be extremely welcome. Thank you.