Skip to main content
No. of Recommendations: 0
Hi everyone,

I will be beginning a new job this fall, and the main retirement vehicle is a hybrid pension system (the Wisconsin Retirement System -- I created a thread a month ago on this topic). I have close to $25,000 in a 403 (b) at my current university, and am seeking some advice on where I should move this money. I currently have a Roth IRA with Ameritrade, but am trying to weigh my options.

I could rollover these funds directly into the WRS, where I'm guaranteed by law a 5% return per year (and in the past 25 years the fund has averaged a 10.3% return per year). Additionally, my new university offers a 403 (b) as well as a 457. The 457 is most attractive, as if I opened an IRA, I planned on investing in Vanguard's Wellington Fund, which is offered as an option in the 457. There is an account maintenance fee of $1 per month, adding an additional dollar at $50,000, then $100,000, etc. The Wellington fund is of the Admiral Shares variety, though, so the operating expenses plus monthly fee would be less than if I opened a traditional IRA with a regular Wellington investment with Vanguard, at least for quite awhile. I'm not sure where the breaking point would be.

My other option is to open an IRA with Vanguard or to open an IRA with Ameritrade. I am correct in assuming that I cannot rollover my 403 (b) into my Roth IRA? I would like to keep contributing to whatever type of vehicle I choose, as my student loan repayments are based on my adjusted gross income, and thus I can significantly lower my AGI through investing in a 403 (b), 457, or traditional IRA. I do fall below the phaseout range for IRA deductions, and probably will for at least 10 years. One caveat is that I am not married, but this may change soon, and we would file our taxes married filing separately so that my student loan payments would not take her income into account. Then the IRA deduction wouldn't apply, as I believe the phaseout is in the $0 to $10,000 range.

Any thoughts?

-Narn Ceredir
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.