Hi,
Hoping someone can double-check my research and conclusions.
My wife is a nurse with access to a savings plan that is 403(b) (pre-tax) and 401(a) (post-tax). Both are being invested in a vanguard index via institutional shares, so the expense ratio is quite low, and there is an employer match up to a certain percent. My understanding is for tax purposes the 403(b) and 401(a) can be treated as a 401(k) pre-tax and post-tax, respectively, and you can do ROTH conversions on both accounts to get the money out earlier without penalty. It seems the main benefit of contributing to the 401(a) is tax-deferred compounding, with the disadvantage of significantly less liquidity.
I work for a startup without benefits, so that simplifies my half. We are also living off less than my salary.
Our strategy would then be to contribute in this priority:
1. Her 403(b) (with employer match)
2. Our IRA's
3. Her 401(a) (no employer match)
4. Brokerage accounts (for income I generate but cannot funnel to her accounts)
Then we withdraw first from the brokerage accounts, and build a ROTH conversion ladder to access the other funds (probably the 401(a) first, but I don't see a significant difference in withdrawal strategies for the different accounts).
The only thing I'm not sure on is if we should omit her 401(a) and send that money to a brokerage account instead where it's easier to access.
Is this sound reasoning? Did I get my facts right? What questions should I be asking?
Thanks in advance for any advice
