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403B vs ROTH as a resident/fellow

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  • 403B vs ROTH as a resident/fellow

    I'm in a one year fellowship and my university gives a lump sum every November, which can be used for anything. It's recommended to put this 5K in retirement and there's no matching. I plan on putting into retirement. But I'm not sure which one has the most benefit: a tax deferred 403b account vs ROTH account for this year. I understand that I'll be an attending starting next August with a higher income but not sure if I should take advantage of my lower tax rate now and invest in ROTH now versus wait until I become an attending to roll over to my ROTH IRA account. Any advice is appreciated.  I'm a novice with financial matters. Thanks

  • #2
    roth IRA now. New year your tax bracket will be higher and Roth is not as convenient.

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    • #3
      Thanks!

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      • #4


        But I’m not sure which one has the most benefit: a tax deferred 403b account vs ROTH account for this year.
        Click to expand...


        If all money made in 2017 is from a stipend, you can not contribute to a Roth. As I recently learned, if you didn't pay SS and medicare taxes on the money it's not considered "earned income" so you're "stuck" with a 403b.

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        • #5
          Does your 403b allow you to designate your contributions as roth? When I was in residency our 403b allowed standard or roth contributions. This was nice as the limit for 403b is higher than roth IRA.

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          • #6
            The guiding principle is to contribute to a Roth account   1) any year that you are subject to a low tax bracket, and 2) you are > 15years from retirement. Contribute to a traditional account  1) any year that you are subject to your highest tax brackets, and 2) less than 15-ish years from retirement.

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