Skip to main content
No. of Recommendations: 1
Hi all-

I'm 31 years old and plan to work until I'm 65 or so. I'm trying to figure out how to invest for retirement. Here's my current situation:

I have about $8,000 in a Roth IRA that I converted from a traditional IRA two years ago but have not added to since. I have about $1,200 in a recently-instituted SEP IRA at work that receives monthly deposits equal to 6% of my pay (all company funds). Finally, when I started working here 2 years ago (before they instituted the SEP IRA) I began tiny paycheck withdrawals into a 403(b) (we're a nonprofit company). The 403(b) has about $1,200 in it as well. All three of these investments are in Vanguard's LifeStrategy Growth fund (VASGX).

I don't plan to use the money for anything before retirement.

The SEP is free money and I can't add to it on my own, so no problem there. My question is, should I be doing the automatic paycheck withdrawals into the 403(b) or the Roth? I gross about $37,000 right now and in a few years I will begin a new career as a marriage counselor, so I don't have grand expectations for high future earnings, but I can't really say what tax bracket I'll be in at retirement (and who knows what they'll look like in 35 years anyway?). Is it wise to fund both? I tend to like things nice and tidy (witness the VASGX choice), with fewer things to keep track of, but if there's a financial advantage to funding both, I'll go with it.

I also have about $8,000 in Medtronic (MDT) stock (used to work there). I've been trying to decide if I should leave it there, or sell some to diversify into other stocks, or sell enough to plunk the maximum allowable into an IRA before December 31st and then again in 2004.

I think the maximum Roth contribution is $3,000. Can I fully fund that and also add to the 403(b)? Or is it $3,000 total between the two? And I'm assuming the SEP IRA doesn't count against that total, right? Remember, it's all employer funds, if that matters.

I guess I should add that I have no appreciable credit card debt, but I do have a significant student loan of about $26,000 at about 7% interest. I'll be taking out another student loan as I head back to school next semester, and I was thinking of taking the maximum they'll give me (which will probably leave me with at least $5,000 extra) and pay off a chunk of the first loan, since the new loan will have a considerably lower interest rate (~3%, I believe). Anyway, should I consider throwing the Medtronic stock at the old student loan as well? One piece of my hesitation is the tax hit that I'd take. My cost basis was/is very low compared to the stock's current (and very steady) price.

I'd love to hear what you Fools have to say!

Thanks, and be well.

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.