No. of Recommendations: 0
Greetings, MajorChip, and welcome. You asked:

<<At work, I have a 403B where I contribute.
My employer pays into a 401A, matching my contributions 50 cents on the dollar.
The maximum matching is 3% for my contribution of 6%.
Currently, I contrubute 12% and get matched 3%.
Would it be smarter to reduce my contribution to 6% and put the other 6% (or more?) into a Roth IRA?>>

IMHO it makes perfect sense to contribute the 6% to your 403b plan to receive the 50% maximum match your employer provides on that contribution. Beyond that level, you need to compare your alternatives on a tax-equivalent basis. If you are as dedicated in an alternative as you are in the 403b (i.e., you contribute a set amount every time you get paid, and that increases at the same rate as your pay does), then often you can do far better in a Roth and in a taxable alternative. That's because you have greater flexibility in your choice of investments that often out-perform the mutual funds available within your 403b plan. You have to run the numbers to see if that's true in your case. I suggest a way to do that in Step 4 of my 13 Steps to Foolish Retirement Planning. You can read those steps at . Do so, run your numbers, and then decide. My bet is the Roth will be very attractive after you have met the maximum match within your 403b plan.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.