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Hi y'all! Through my employer, I have access to both a 403b (w/ employer match) and 457b. I am very fortunate to have an income that allows me to max out annual contributions to both accounts. My employer's plan allows me to contribute with pre- and post-tax dollars in both accounts, in proportions that I specify (i.e., I can have pre-tax and Roth funds in both accounts), excepting the matching contributions which have to be contributed on a pre-tax basis.
For the past two years, I've been designating all 403b contributions as standard pre-tax, and all 457 contributions as Roth -- about a 1:1 split. While I did some research before setting this allocation, without putting an immense amount of thought into it I figured that tax diversification of my largest investment vehicles would be the "safest" approach, as it's challenging to precisely forecast what my income tax will be when I enter retirement 20-25 years from now. I generally try to avoid analysis paralysis, but I was curious if any of you smart folks have encountered a similar situation before or how you might counsel someone who is. Thank you in advance for your thoughts!
submitted by /u/upstatewilly
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For the past two years, I've been designating all 403b contributions as standard pre-tax, and all 457 contributions as Roth -- about a 1:1 split. While I did some research before setting this allocation, without putting an immense amount of thought into it I figured that tax diversification of my largest investment vehicles would be the "safest" approach, as it's challenging to precisely forecast what my income tax will be when I enter retirement 20-25 years from now. I generally try to avoid analysis paralysis, but I was curious if any of you smart folks have encountered a similar situation before or how you might counsel someone who is. Thank you in advance for your thoughts!
submitted by /u/upstatewilly
[link] [comments]
Continue reading...
