Author Topic: Is it worth it? Questions about a 403b  (Read 2342 times)

ereamrod

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Is it worth it? Questions about a 403b
« on: January 15, 2017, 07:10:24 PM »
Is it worth it to utilize my company's 403b plan if there is no match?  There is a tax advantaged option and a Roth option in a TRF.  Is it worth it to use this or should I open an account with vanguard instead?

JLee

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Re: Is it worth it? Questions about a 403b
« Reply #1 on: January 15, 2017, 07:28:58 PM »
The tax advantage is huge - with very few exceptions, it would be worthwhile.

ereamrod

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Re: Is it worth it? Questions about a 403b
« Reply #2 on: January 15, 2017, 08:02:51 PM »
Thank you! Should I max out the tax advantaged before contributing to the Roth?  They max at 18k each

JLee

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Re: Is it worth it? Questions about a 403b
« Reply #3 on: January 15, 2017, 08:16:52 PM »
Thank you! Should I max out the tax advantaged before contributing to the Roth?  They max at 18k each

You'll be limited at $18k total (combined Roth and Traditional) for the 403b. Do you have a 401k as well?

shuffler

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Re: Is it worth it? Questions about a 403b
« Reply #4 on: January 15, 2017, 08:21:57 PM »
Thank you! Should I max out the tax advantaged before contributing to the Roth?  They max at 18k each
They (Traditional and Roth) are both tax advantaged, but in different ways.
If you understand the difference, you'll be better able to choose between the two.

ereamrod

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Re: Is it worth it? Questions about a 403b
« Reply #5 on: January 16, 2017, 04:30:13 AM »
I know one gets contributions before I pay taxes and the Roth is after tax dollar contributions.  I don't have an additional 401k at the moment but I'd like to save 35k/ year and am trying to figure out the best way to do that.

NoStacheOhio

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Re: Is it worth it? Questions about a 403b
« Reply #6 on: January 16, 2017, 07:30:46 AM »
Go through your plan documentation to find your plan fees and investment choices. Post those here and we can be more helpful.

Very generally, a 403b/401k is your first-choice savings vehicle. Government-sponsored 457b plans are even better, but more rare.

After that, the account you choose will depend on factors like your income and tax rates.

If you're totally new to investing (and even if you're not) read this: http://jlcollinsnh.com/stock-series/

Specific to your question, this http://jlcollinsnh.com/2015/06/02/stocks-part-viii-the-401k-403b-tsp-ira-roth-buckets/ and this http://jlcollinsnh.com/2013/06/28/stocks-part-viii-b-should-you-avoid-your-companys-401k/

tl;dr - the fees have to be pretty bad before you consider skipping your employer-sponsored plan.

Mezzie

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Re: Is it worth it? Questions about a 403b
« Reply #7 on: January 16, 2017, 09:27:03 AM »
I max out my 403(b) now. Even before maxing it out, I benefitted significantly from the tax savings.

Thanks to a friendly member on here, I found out I am also eligible for a 457(b). That thing is magical, and had I known it existed, I probably would have maxed that out first. It would be worthwhile to find out if you're eligible -- that's another $18,000 you can save, tax advantaged, if you are. Add in an IRA, and you've got quite the tax-advantaged stash potential.

ereamrod

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Re: Is it worth it? Questions about a 403b
« Reply #8 on: January 17, 2017, 01:15:45 PM »
I read JLCollins book which sparked my interest to be more informed and involved in this.

The company is Fidelity.  I looked at  the fees listed under the "required disclosure information" and it seems that $46/year is for an administrative record keeping fee.  I confirmed this on my statement for the last year and it seems like that is the only thing that's been deducted.  There is another section that says individual fees and expenses could be applied for "loan set up, inservice withdrawal fee, minimum required distribution fee, return of excess contribution fee, overnight mailing fee, and participant advisory fee"  all vary from $25-50 except the adviser which varies depending on the adviser.

There are 3 choices for my plan; Tiers 1, 2 and 3. I'm currently invested in the Vanguard Institutional Retirement 2055 Fund via Tier 1.  The ER for this is 0.1%.  I've attached screen shots of what was on the form.