1. Have her look into the "back door Roth" with a CPA / tax person to see if she can put away MORE than the Roth IRA limit.
2. Taxable brokerage account with Federal and Illinois tax-free municipal bonds (though be ultra careful about which exact bonds you buy!!! Chicago schools? Illinois State GO Bonds? NO!!!!!! Airport bonds? Maybe...).
3. Physical gold does not generate income tax until you sell it. She could buy some of that.
Teacher 403[b]
Moderator: Global Moderator
Re: Teacher 403[b]
I wouldn't pretend to offer advice other than get a spreadsheet that will calculate present and future values of money/periodic investments, make the relevant assumptions and see how the math works out.
And I'd really check out if IL has any connection to the contract.
And I'd really check out if IL has any connection to the contract.
Re: Teacher 403[b]
Maybe pay off the house and all debts instead of putting money into 403b. It's a fantastic state to be in.
Re: Teacher 403[b]
Hi MangoMan!
Is this 403b with TIAA-CREF? If so, that expense ratio and those fees seem very high to me. I would definitely inquire to find out if there any other options besides those unappetizing annuities, and under what circumstances can money be rolled out of the plan. Also see if there is a guaranteed return fund, which might have a lower expense and be a reasonable "safe" option for at least some tax-deferred savings.
Unfortunately, at a marginal tax rate of 31.75%, it's still worth contributing even with those fees - unless the money is stuck in those annuities permanently. If that's the case, then I'd probably avoid contributing, save into trad/Roth IRAs/taxable, and just be happy with that enormous pension.
Is this 403b with TIAA-CREF? If so, that expense ratio and those fees seem very high to me. I would definitely inquire to find out if there any other options besides those unappetizing annuities, and under what circumstances can money be rolled out of the plan. Also see if there is a guaranteed return fund, which might have a lower expense and be a reasonable "safe" option for at least some tax-deferred savings.
Unfortunately, at a marginal tax rate of 31.75%, it's still worth contributing even with those fees - unless the money is stuck in those annuities permanently. If that's the case, then I'd probably avoid contributing, save into trad/Roth IRAs/taxable, and just be happy with that enormous pension.
Re: Teacher 403[b]
Most folks teach 5 years then quit. A 403b can always roll to an IRA at a discount house. Maybe bad fees can be tolerated for a few years, then gotten rid of.
Re: Teacher 403[b]
Any amount of labor and searching for Our Little Girls, right? Didn't it seem like you brought her home from the hospital just yesterday? Now mine has a Roth and ETFs.