Author Topic: Newly liquid with existing 403b  (Read 1076 times)

pdean

  • 5 O'Clock Shadow
  • *
  • Posts: 54
  • Location: Sewanee, Tennessee
Newly liquid with existing 403b
« on: November 21, 2016, 08:39:18 AM »
We recently downsized, and are now debt-free with around 70K to do something with. (We are both working and net ~80K a year).
I have an existing 403b account with TIAA with 78K in it. It's earned a whopping 1.6% so far this year. I haven't paid much attention to the allocations, however. It's had the same principal since I left my teaching job in 2012.

I have no other investment accounts, retirement accounts, etc. though my wife has public-school-teacher retirement happening. Should I start paying into the 403b? I understand the limit is 18K a year.

Thanks for any advice.

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 2143
  • Location: Cleveland
Re: Newly liquid with existing 403b
« Reply #1 on: November 21, 2016, 10:24:38 AM »
Open tIRAs for both of you and max those out. You have 22k in IRA space between 2015 and 2016 contributions.

What does your spending look like?

Maxing out your other tax-deferred space early in the year, and living off the remainder of the nest egg is one option. If you have an employer match, check to see how they do it. If you hit 18k before the end of the year, do you give up matching contributions? If so, you'll want to only contribute $1500/month.

If you don't have an emergency fund, and want one, put some of the money in an emergency fund.

Don't worry about year-to-year fund performance, but do check to see what funds you're in. Make sure they're the ones you really want to be in. Generally, MMM advice is to go for low cost, broad based index funds.

DavidAnnArbor

  • Handlebar Stache
  • *****
  • Posts: 1954
  • Age: 53
  • Location: Ann Arbor, Michigan
Re: Newly liquid with existing 403b
« Reply #2 on: November 21, 2016, 11:58:39 AM »
I'm not sure I understand your situation. The traditional IRAs make sense. Also, are you adding the maximum to any 401k or 403b or 457 plans?

pdean

  • 5 O'Clock Shadow
  • *
  • Posts: 54
  • Location: Sewanee, Tennessee
Re: Newly liquid with existing 403b
« Reply #3 on: November 21, 2016, 02:38:10 PM »
More info:
The 70K is from primary home sale so tax-exempt. (Yes?) So that's not a consideration.
I merely wondered if, given the existence of my 403b, I should put something into it, or ignore and start another vehicle.
Also: I'm 57.

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 2143
  • Location: Cleveland
Re: Newly liquid with existing 403b
« Reply #4 on: November 22, 2016, 06:14:53 AM »
More info:
The 70K is from primary home sale so tax-exempt. (Yes?) So that's not a consideration.
I merely wondered if, given the existence of my 403b, I should put something into it, or ignore and start another vehicle.
Also: I'm 57.

403b/401k is generally your first-line retirement savings vehicle. The limits are pretty high, it's deducted right from your paycheck, and it's tax deferred.

Since you're over 50, the IRA limits are $6,500 each and the 403b limits are $24,000 each. That's $122k in tax-deferred space for 2016/2017. Use as much as you can.

pdean

  • 5 O'Clock Shadow
  • *
  • Posts: 54
  • Location: Sewanee, Tennessee
Re: Newly liquid with existing 403b
« Reply #5 on: November 22, 2016, 07:16:08 AM »
Thanks, NoStache.