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Author: MattMiler Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: 403b and Roth IRA Date: 5/10/2000 3:52 PM
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Maudobucks-
Great post, I'll do my best to answer your questions and try to provide a little subjective insight.

I am 29 years old and currently contribute to a 403b plan offered through my employer. Can I also open a Roth IRA? If so, which one benefits me most?

Yes, you can contribute to both accounts. Both accounts have significant tax advantages, but my recommendation (based on your age) is to prioritize your Roth contributions. The earnings on this account are never taxable; this advantage is worth more than the 25 - 35% tax deduction you would save by contributing the funds to your 403b.

My objectives are long term buy and hold. If I were to open a Roth IRA I would likely invest in a combination of Dow companies, probably the Foolish Four or a variation of it.
So, any suggestions on what combination of contributions I should make relative the 403b and Roth?


I won't make specific recommendations, but I do believe you should hold your more aggressive investments in your Roth IRA. Due to your long holding period, you can tolerate large price deviations and your should try to maximize return. I do not recommend trying a Foolish Four strategy until you have $1500 to put in each stock (total account balance $6000). Transaction costs can be prohibitative for this strategy, so it doesn't make sense to have four $500 positions.

Best of luck.

- Matt
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