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I have a TIAA retirement account through my present employer. Right now the plan doesn't take much out of my pay (graduate student salary) and place it into the account. I would like to optimize my retirement investing by opening a Roth IRA and begin regular contributions. Should I max out my contributions to the 403b or manage my own funds with the Roth IRA?

It doesn't have to be an either/or choice. You can do both, and you may want to since the Roth contribution is currently limited to $2000/year. As a previous poster mentioned, if your employer is matching any of your contributions to the 403b, you definitely want to get the "free money" out of that match. It's an instant sizeable return on your investment.

Beyond the matching funds, the situation becomes a lot less clear, and varies from person to person. There are lots of calculators on various financial websites, including one here at the Fool, that could help you with that decision. There are plusses and minuses to both, and I would say if you think you can get greater returns through the extra flexibility of the Roth, then that is probably a good way to go. If you're happy with putting your money in the CREF funds (and there's nothing wrong with that) and don't want to devote the extra energy to managing your own money, then the 403b may be the way to go.

Does the 403b have any benefits that the Roth lacks? Is it possible to not participate in the 403b and go to a Roth instead?

The 403b has two potential (depending on your situation) major advantages over the Roth. First, and this advantage IMO is underestimated by many people, is that you get a current year tax-savings on your contributions to the 403b. You will pay taxes on the money eventually when you withdraw it, but at that point popular convention says you will be in a lower tax bracket after retirement, so you won't be taxed at as high a rate as your current income--although being a graduate student, you may be in a low tax bracket already :-). From a pure tax standpoint, the Roth only becomes better if you will be in a higher tax bracket after retirement.

The current year tax deduction also allows you to be able to contribute more dollars to your account (i.e. you may only be able to afford $1500/year to contribute to a Roth, but with the tax break can put $2100/year in a 403b) and accumulate a higher balance faster. For young people, I think this leads to future benefits in itself as the more money in your account, the more attention you are likely to pay to managing it, and the more you will learn.

The second advantage to the 403b is that it has a higher contribution limit. It varies as a percentage of your income (TIAA-CREF can calculate it for you), but it is likely a lot more than the current $2000/year for the Roth.

It is possible for you to not do the 403b and do the Roth, and it is also possible for you to do both.
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