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Author: puterlady Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: 403(b), Roth, or both?? Date: 4/8/2000 12:59 PM
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I'm employed at a state institution, and have been paying into our Retirement Plan (a 401(a)) for almost 20 years now. My contibutions are payroll deducted, making them "non-taxable gross", and are matched by the university (free money). (The 20 year participation is important, in that I have now been in long enough to get 100% medical insurance coverage (no cost) through the plan.) We do not pay into Social Security, so I cannot expect any SS distributions when I'm old and gray.

That's the bulk of my current retirement planning, and I know it's not enough. I know I've got to get going on more retirement investments. I'm 42 yrs. old. I really don't wish to continue working at the university for another 23 years, but expect to be there for another 6 months to a year, and then I'd like to begin working as a Realtor full-time. I've been licensed for almost 2 years, but my real estate income has been less than satisfactory.

We have a 403(b) plan at work, that I am debating participation in. If I start now, I'll only have 6months to a year participation if I do leave there. BUT, I can make non-taxable contributions into the plan while I'm there. Does it make sense to start it, with such a short participation timeframe?

I'd like to open a Roth IRA, too. I've already filed my 1040, and expect a check any day now. I'd like to open a Roth with $1k of that return and then begin direct deposit to it to bring me up to $2k contribution for the year 2000. (Is it really worth my while to try to do this prior to April 17, and file an amended return for 1999??? or should I just start fresh for 2000??? If I really pinch pennies, I could have a $1k contribution for 1999, and push hard to get a full $2k in for 2000.)

How might you advise this Fool?








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