Looking for any advise about changes to my employer's 403b plan. Currently I contribute $18K to a 403b, and get a 1.75% match into a 401k. Was told yesterday that my employer will be allowing Roth option to the 403b plan beginning in Sept, but any contributions to the Roth will NOT receive any match. The plan will not allow in-plan transfers from non-Roth to Roth (at lease for now). Due to my salary, contributing up to the match (4%) maxes out my annual contributions. The retirement plans manager told me that by law, a plan can only recognize 2017 earnings up to $270K for match. I've already hit my maximum match for this year of $4725 (1.75% of $270K) into the 401k, but still have $3600 left to be able to contribute to the 403b for the rest of this year (which I can choose to direct to Roth in Sept).
I think I'll switch the rest of this year's 403b contributions to the Roth, but what do you think I should do beginning in 2018? The idea of a "free" $4725 with the match is obviously enticing, but my time horizon for retirement is > 30 years, and the idea of having gains taxed out of a 401/403b at retirement at maximum regular income tax rate (which is what I'm at now, and anticipate I'll be at retirement) wears on me. I also want to avoid RMDs (hoping that I won't need the income at retirement).
Should I just contribute $18k into Roth 403b, but get no match? (pros: no future taxation, no RMDs; cons: lose out of $4725/year)
Contribute 4% every two weeks into the regular 403b until I hit the maximum match, and then transfer the remaining contribution balance into the Roth 403b (pros: still get the max match, able to contribute some to Roth; cons: still have to deal with significant future gains tax and RMDs, lower balance in Roth)
Love to hear some thoughts.
I think I'll switch the rest of this year's 403b contributions to the Roth, but what do you think I should do beginning in 2018? The idea of a "free" $4725 with the match is obviously enticing, but my time horizon for retirement is > 30 years, and the idea of having gains taxed out of a 401/403b at retirement at maximum regular income tax rate (which is what I'm at now, and anticipate I'll be at retirement) wears on me. I also want to avoid RMDs (hoping that I won't need the income at retirement).
Should I just contribute $18k into Roth 403b, but get no match? (pros: no future taxation, no RMDs; cons: lose out of $4725/year)
Contribute 4% every two weeks into the regular 403b until I hit the maximum match, and then transfer the remaining contribution balance into the Roth 403b (pros: still get the max match, able to contribute some to Roth; cons: still have to deal with significant future gains tax and RMDs, lower balance in Roth)
Love to hear some thoughts.
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