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Ottakee

New to a 403(b)---15 years from retirement

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3 hours ago, krow36 said:

I think your proposal makes sense. Hopefully you can sell in your brokerage account without having to pay any (or not much) capital gains tax? If your income plus any capital gains don't push you out of the 12% bracket, your capital gains will be taxed at 0%.

If you're currently contributing to the brokerage account for retirement, instead I would max out the 403b before adding to the taxable account.

Is the 0.45% administration fee the same for each of the 6 vendors in the Consortium? I don't think the 0.45% admin fee should influence you decision to max out the 403b account, or to go Roth on half of your contribution. 

The capital gains plus my income shouldn't push me out of the 12% bracket.  I just can't do it in 2019 because they won't have been invested in for over a year for some of the funds.

Why should I max out the 403B first?  They will both be taxable but my private account can be accessed at any time with no penalty and right now I am already in the lowest tax bracket. 

The 0.45% is the lowest out of any of the 6 vendors.  The rest are 1-1.5% and most of their offerings have higher expense ratios.

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1 hour ago, Ottakee said:

The capital gains plus my income shouldn't push me out of the 12% bracket.  I just can't do it in 2019 because they won't have been invested in for over a year for some of the funds.

Have you considered selling just the funds with long-term cap gains this year so that the space in the 12% bracket doesn’t go to waste?

 

1 hour ago, Ottakee said:

Why should I max out the 403B first?  They will both be taxable but my private account can be accessed at any time with no penalty and right now I am already in the lowest tax bracket. 

I didn’t explain what I meant very well, sorry. I was just trying to make the point that maxing out your tax-deferred accounts and the Roth IRA before contributing to a taxable account for retirement is usually recommended. Of course there are lots of other reasons to save in a taxable account. Your plan to max out your 403b, half traditional and half Roth is great!

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On 8/31/2019 at 10:38 PM, tony said:

Your age in bonds is always a good way to go if you are uncertain  of allocations and wish to do it yourself. In that case all you would need is maybe 3 funds. Total Stock Market Index, Total International Index plus an allocation to bonds based on your age. It will be cheaper if you do it yourself. So if you are 50 you could go 50% Bonds 25%  Total Stock Index and 25% International. Your age in bonds is a general suggestion and can be adjusted if you wish to be a bit more aggressive.

I've never heard this before and really need this info!  Glad I stumbled over here!

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Jane

Steve Schullo is a master of using bonds. I've been stubborn over the years about adding bonds but he convinced me. Its important to scale back on stocks as you get older.  Steve has also written a good book about the dangers/benefits of stocks. If you are nice to him he might send you a free copy. Its a good read. You can e-mail him from this site.

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