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Subject:  Retirement Planning Question Date:  3/4/2000  11:31 AM
Author:  Tag72 Number:  19792 of 88494

Hi Fools,

I appreciate any help you can give me. It is always good to get advice to get a person thinking. Also, please excuse me if this is a little lengthy, I want to give as much info and personal thoughts as possible. I had read an article last week by Ann Coleman and just now read a reply post(#19610) by TMF Pixy about contributing to a tax deferred plan like a 401K/403b or a long term taxable account to withdraw from for retirement. This is taking in consideration that an IRA is not available or it is maxed out. I would appreciate some personal thoughts on my situation. I am single with no children and currently maxing out a Roth IRA($2000). I am a teacher and I am contributing into a 403b non-matching(of any sort) plan through Vanguard(through my doing). Reading the article and the post, makes me wonder if I retire, is it in my best interest to contribute to my 403b non-matching plan or just contibute the same amount of money to a long-term capital appreciating taxable account? I know that the 403b is giving me a tax deduction and I can switch funds or companies(I don't know why I would switch away from Vanguard) without tax consequences. However, the fact that is making me think about contributing to a taxable long term account for retirement only is that when I withdraw money I will be taxed only on a long-term capital gain rate 20%(I did hear that the government is thinking about reducing this to 18% if held over 5 years, Correct?) When I withdraw 403b money for retirement, I will be taxed at my income tax rate at that time taking in consideration I am receiving my State retirement income only is going to probably be 28%. Would it not be Foolish for me to stop my 403b and just contribute to a long-term taxable account? Any thoughts are greatly appreciated. If you need for info, please ask. Again, sorry for the length. Thanks in advance!


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