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Subject:  Re: How much is enough in my 403b? Date:  12/16/2000  10:06 PM
Author:  Carpian Number:  26657 of 97882

I am assuming that you are in a 28% or higher tax bracket now. I can reassure you that in retirement the concept that you'll be in a lower tax bracket is not accurate.

This will vary from person to person. My own rule of thumb is that if I work to the point where I am in a higher tax bracket when I retire, then I worked too long. :)

And if I am in the same tax bracket, then pre-tax contributions still come out ahead IMO, assuming I invest the money the same way in my 403b (or 401k or traditional IRA) as I would in a Roth. (I have better options with a Roth than my 403b, so I do both). The reason pre-tax comes out better is that tax savings on the 403b contributions are at your marginal rate (i.e. 28%), while the taxes you pay in the future will be at your average tax rate (probably around 20%). So in the 403b you end up paying about 20% taxes, while the income you're putting in your Roth is taxed at 28%. Other things being equal--which they often aren't--the pre-tax comes out better.
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