Author Topic: Question about 403b  (Read 391 times)

madsan11

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Question about 403b
« on: March 26, 2019, 06:52:44 AM »
Hi everyone,
I am new to mustachianism and recently started a new job, my first real career job. I am offered a 403b through my job, would you recommend contributing to that as well as index funds? What percentage of my income should be invested where? My concern is that I put too much in the 403b and won't be able to retire early cause I won't be able to access that money. Thanks!

RWD

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Re: Question about 403b
« Reply #1 on: March 26, 2019, 07:42:57 AM »
A 403b is just a bucket. You can invest in index funds inside of a 403b (if you can't then it's a pretty crappy plan). Whether I recommend investing would depend on the fund selection and any management fees for the plan. But generally the advice is "as much as possible." See Investment Order post.

The percentage of your income you save should be based on when you want to retire. Where you should direct that income is described in the investment order post I linked above. For a chart on how savings rate translates to years worked check out MMM's post here:
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Also, I would like to clear up up your misconception about not being able to access that money when you retire early. There are multiple ways to get to it without paying penalties:
https://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/