Put extra savings in taxable or 403b (no match)?

[formerlydivorcedmom]

We are just about to have the kids' college funds at our goal level, so we will have an extra $7k/year to invest for retirement.  Where should we put it - taxable account or H's 403b (no match)?  My company also allows for Roth 401k contributions in excess of the traditional 401k but I don't know much about how that works.

Me (42F), H (43M), 3 kids (11, 13, 15)

Current annual savings:
*my 401k and his 457 are maxed out.  I get a 6% match; he does not.
*Roth IRAs for both of us are maxed out
*$1k/year extra mortgage paydown (so that mortgage ends when child support ends)
*$5k/year into brokerage account

Further details
Income:
Me: 127k.  +8% bonus on good years (NOT for 2020).
H: 40k
child support: 25k until May 2024; 15k from Jun '24 - May '27, then 0.

Debts:
House - worth 300k, owe 87k @ 2.5%.  P&I ~ $14k/year, Taxes & Ins = $16k/yr
No other debts

Assets:
Cash: $25k
Brokerage: 105k
401ks: $190k
457: $60k
Traditional IRAs: $515k
Roth IRAs: $96k

Plan:
I will retire when investments reach $1.75M (age 48/49).  I will probably earn ~$5k/year for 5-10 years after that.
H will work 1-3 years longer.  He may earn $2.5-$5k/year after.
Non-COLA pension starting at age 60 = ~12k/yr
SS & teacher pension starting at age 70 = $45-55k/year

Estimated retirement spending: $60k/year + $20k for medical expenses and taxes

Since we're done with college savings, our options for extra money are:
1) Put the $7k in brokerage account
2) Put the $7k in H's 403b - NO match
3) mix of the two?
4) pay down the house even faster

I don't think paying down the house is the right option but I'm torn on whether to put the money in the brokerage or shelter it in the 403b.

[terran]

Short answer: Probably the 403(b), unless the investment options are terrible.

The employee salary deferral limit is combined between traditional and Roth (and also between employers), so your plan doesn't allow Roth after you've maxed out traditional. Probably what you've seen is that they allow after-tax contributions after you've maxed out your traditional/Roth limit. After-tax contributions are usually a bad deal because you don't get a tax deduction when you contribute (unlike traditional) and you also pay taxes on the gains (unlike Roth), so it's basically the worst of both worlds. The exception is that some plans let you roll the after-tax contributions into Roth 401(k) or out of the plan into Roth IRA while you're still working, making it essentially the same as contributing to Roth. This is colloquially known as a "mega backdoor Roth" contribution. Your employer or plan custodian probably won't be familiar with the term, but it should help if you want to google for more information.

You'll probably want to make sure you have 5 years of spending after other income streams in Roth contributions and brokerage by the time you retire so you can get a Roth conversion ladder going to access your tax deferred retirement accounts before you're 59.5 years old.

[ericrugiero]

I have chosen to do the mega backdoor Roth that terran mentioned above.  My prediction is that tax rates will go up in the future and I have much more money in traditional than in Roth.  So, I like the idea of getting a little more money into Roth accounts where it grows tax free.  But, my pre-tax space is all maxed out.  If your plan allows for in service roth conversions, that would be a good option.  You do have a lot of time to do Roth conversions after retirement so if tax rates don't grow too fast the 403B would also be a good option.  I personally would do one of those rather than after tax accounts unless your investment options are terrible.