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<<I used to contribute $10,000 (15%) of my gross to a 401K plan. This reduced my tax liability while the contributions grew taxfree until withdrawal. My employer also contributed $4,000 (up to 4% of my gross until I hit the $10,000 limit).

Now I can contribute 6% of my aftertax earnings and my employer makes a contribution of up to 4% of my gross. Since this is aftertax it does not reduce my tax liability.

So, in comparison, if I contribute $10,000 to the 401K plan I save $2,800 in taxes (assuming the 28% tax bracket) but in the 403B plan I end up paying taxes on the $10,000 because the contribution to my 403B does not reduce my gross income.>>

Comes the dawn. Your plan obviously does NOT include an option for salary deferral. How utterly antiquated and passe of your employer. Are you sure you really want to be employed at a place so out of touch with modernity? <g>

This being the case, you won't be able to do much. You can urge your employer to adopt a salary deferral provision within the 403b. If your AGI is low enough ($50K for joint filers and $$30K for single), you can use a deductible traditional IRA. Otherwise, you're stuck with regular taxable investments or a nondeductible IRA. As to the latter, the Roth will be the best for the ultimate tax free withdrawals.

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