Author Topic: 403B, Roth 403B, or Roth Vanguard  (Read 1183 times)

canisius

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403B, Roth 403B, or Roth Vanguard
« on: April 05, 2017, 03:25:28 PM »
We already have a Roth IRA with Vanguard. However, my employer switched financial providers. It offers a 403B, and Roth 403B and employer pays fees. Theres also a 457, but fees are about 1%. We are in marginal 15% (real rate about -10%) and expect to receive a pension and retire in 15% tax bracket. I like the no fees, but from what I can tell the difficulty of withdrawing from Roth 403B. Do withdrawals work the same as Roth 403B? Should we switch from Roth IRA to another vehicle? Or should we divide and hedge our bets?

MDM

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Re: 403B, Roth 403B, or Roth Vanguard
« Reply #1 on: April 05, 2017, 05:00:35 PM »
I like the no fees, but from what I can tell the difficulty of withdrawing from Roth 403B. Do withdrawals work the same as Roth 403B?
Not quite sure what is being asked...?

In general, see Investment Order.

canisius

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Re: 403B, Roth 403B, or Roth Vanguard
« Reply #2 on: April 05, 2017, 05:11:20 PM »
In other words, with a 403B/401K I can do a backdoor conversion and with a Roth IRA, I can do withdraw my contributions. Can I withdraw my contributions to a Roth 403B?

MDM

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Re: 403B, Roth 403B, or Roth Vanguard
« Reply #3 on: April 05, 2017, 06:03:16 PM »
In other words, with a 403B/401K I can do a backdoor conversion and with a Roth IRA, I can do withdraw my contributions. Can I withdraw my contributions to a Roth 403B?

In short, no.  For the longer "it depends..." answer, see Retirement Plans FAQs on Designated Roth Accounts  including:
Quote
Since I make designated Roth contributions from after-tax income, can I make tax-free withdrawals from my designated Roth account at any time?

No, the same restrictions on withdrawals that apply to pre-tax elective contributions also apply to designated Roth contributions. If your plan permits distributions from accounts because of hardship, you may choose to receive a hardship distribution from your designated Roth account. The hardship distribution will consist of a pro-rata share of earnings and basis and the earnings portion will be included in gross income unless you have had the designated Roth account for 5 years and are either disabled or over age 59 .

magnuminator

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Re: 403B, Roth 403B, or Roth Vanguard
« Reply #4 on: April 06, 2017, 11:30:37 AM »
What are the investment options in the 403b plans like?  I'm not especially familiar with those vehicles but (at least in some states, in the past) I've seen plans that limit 403b contributions to annuity purchases.  If that is the case, I'd rather pay higher fees for a 457 or a Roth IRA.

canisius

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Re: 403B, Roth 403B, or Roth Vanguard
« Reply #5 on: April 06, 2017, 01:10:18 PM »
Yes, if it's an annuity, I'd forego it (which is why I started the Roth IRA (or actually Roths, since my wife and I have one) at my last place of employment.  The options are pretty good and includes PIMCO, Oppenheimer, and T.Rowe Price.