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Author: spsullivan Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: RE: What Should I do Date: 7/26/2000 4:18 PM
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Rhecker:
So as a teacher I would be in the 28% bracket, putting in funds, but I assume when I retire that there is no way I will be in the 15% bracket. So the roth would be my better choice?

JTMITCH:
As far as 403B's what do I need it for anyway, what benefits are there, why can't I just choose some mutual funds I want to invest in and do it on my own?

Thanks guys for the input!
Shawn
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Author: jbking Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23681 of 76418
Subject: Re: RE: What Should I do Date: 7/26/2000 4:43 PM
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The 403(b) would offer tax-deferred growth which isn't what you'd have with a taxable mutual fund account(Now, if the options within the 403(b) are super-stinky this can take away the benefits). Some 403(b)s could have a few options in them if a 403(b) is similar to a 401(k) which I think it is.

There are a few more things to consider with a Roth such as whether the 403(b) changes the deductibility of a Traditional IRA for you along with the other minor differences(No mandatory withdrawal age, access to contributions without penalty) that may also tip some scales.

JB

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Author: asarver Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23682 of 76418
Subject: Re: RE: What Should I do Date: 7/26/2000 5:16 PM
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Hello! There are a bunch of calculators out there what will let you plug in your numbers and then tell you which is better, ROTH or traditional. Here is a link the Vanguard site which has more info: http://majestic.vanguard.com/RRC/DA

I think that in general, Roth's are more advantageous if you plan to be in the same tax bracket or higher than the one you are in now.

Good luck!

:)

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Author: mdorsey One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23691 of 76418
Subject: Re: RE: What Should I do Date: 7/26/2000 8:51 PM
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Roth can increase your retirement take-home at the expense of current take-home. $2000 in a ROTH after tax compared to $2000 in deductable IRA will yield more after-tax at retirement by 15% or 28% or 31% or whatever your retirement tax-rate is.

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Author: rhecker One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23706 of 76418
Subject: Re: RE: What Should I do Date: 7/27/2000 8:50 AM
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So as a teacher I would be in the 28% bracket, putting in funds, but I assume when I retire that there is no way I will be in the 15% bracket. So the roth would be my better choice?

There is a nice article hidden somewhere on the TMF site which give examples of a few different scenerios for investing with a Roth or a traditional. It also accounts for the possibility of investing your tax-deferred savings if you go for the traditional IRA. Maybe TMF Pixy can point you to it, since I think he's the one who wrote it. Otherwise, you can work out some scenerios on your own.

I believe what you will find is that if you compare the Roth and the traditional (assuming you invest your tax-deferred savings in a taxable account), they result in equal gains when you maintain the same tax rate. Then if your tax rate goes up, the Roth wins - and if it goes down, the traditional wins.

You also have to consider what all of your sources of income will be when you retire. If you have something like a 403B along with a Roth, then maybe you would be withdrawing 15k from each every year- leaving you in the 15% tax bracket since the Roth isn't taxed. If your 403B plan matches any part of your contributions, then you want to at least make sure to take advantage of this "free money" no matter what.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23716 of 76418
Subject: Re: RE: What Should I do Date: 7/27/2000 9:55 AM
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Rhecker writes:

<<There is a nice article hidden somewhere on the TMF site which give examples of a few different scenerios for investing with a Roth or a traditional. It also accounts for the possibility of investing your tax-deferred savings if you go for the traditional IRA. Maybe TMF Pixy can point you to it, since I think he's the one who wrote it. Otherwise, you can work out some scenerios on your own.>>

Yeah, I've lost track of the article, too, but the gist of what I wrote is contained in post number 1567 on this board at http://boards.fool.com/Message.asp?id=1040013000441002&sort=postdate.

Regards..Pixy

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