403(b) retirement plan
#1
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403(b) retirement plan
I got hired by my ideal role yesterday after originally them being unsure on hiring me a couple months ago due to my situation and having no EAD (they didn't understand how it worked), but the person they offered it to fell through at the last minute and they called yesterday and offered me the job right after they asked if I now had my EAD! So I start next week now after orientation this week!
I've got a lot of paperwork to fill out, and one of them is all centered around the 403(b) retirement plan.
Now, I know absolutely nothing so any help, guidance, or tips would be hugely appreciated! I'm in my 20's, so very new to this but I want to get a retirement plan started. I'm going to put a couple hundred in each paycheck (biweekly) hopefully (I'll make a biweekly budget plan before I decide exactly how much).
Unfortunately, my employee do not offer a match scheme for this. From my brief research on google, if I don't already have any retirement funds set up, then this is not a big deal, it's more important to get one started? I'm leaning more towards a Roth so that I'm taxed now and what I have when I retire in my retirement funds is already taxed and I don't have to worry about tax at a later date. Any thoughts on Roth vs standard (if that's the right term)? I am also reading it is best to invest in mutual funds as opposed to annuities?
Any other advice, tips, or help you guys can give on this topic? Appreciate any help, no matter how little, as this is all new and extremely confusing to me!
I've got a lot of paperwork to fill out, and one of them is all centered around the 403(b) retirement plan.
Now, I know absolutely nothing so any help, guidance, or tips would be hugely appreciated! I'm in my 20's, so very new to this but I want to get a retirement plan started. I'm going to put a couple hundred in each paycheck (biweekly) hopefully (I'll make a biweekly budget plan before I decide exactly how much).
Unfortunately, my employee do not offer a match scheme for this. From my brief research on google, if I don't already have any retirement funds set up, then this is not a big deal, it's more important to get one started? I'm leaning more towards a Roth so that I'm taxed now and what I have when I retire in my retirement funds is already taxed and I don't have to worry about tax at a later date. Any thoughts on Roth vs standard (if that's the right term)? I am also reading it is best to invest in mutual funds as opposed to annuities?
Any other advice, tips, or help you guys can give on this topic? Appreciate any help, no matter how little, as this is all new and extremely confusing to me!
#2
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Joined: Jan 2016
Posts: 1,168
Re: 403(b) retirement plan
I have had a roth 403b plan in the past, now rolled into a roth IRA once I moved to a for-profit organisation. I do not know your circumstances, but whatever plan I am offered, I max out my contributions, especially since I intend to stay in the US and retire here. Currently my max is $5500 (roth ira), my old 403b I believe was circa $18000.
Never too early to start saving for retirement!
Never too early to start saving for retirement!
#3
Re: 403(b) retirement plan
403(B) is the non profit version of the 401(K).
I'd save as much as you can into the scheme, especially since it is tax free savings (just so long as you don't withdraw before the age of 59 and a bit.
My employer (non profit) will put in 9%, provided I match at least 5% of my pay.
I don't know if I can afford to retire in 20 years, but I do intend to put as much as I can into the scheme over the years to at least try and get something of value. I doubt my UK pensions will cover the cost of heath care insurance in the USA when I do retire.
Did the company arrange for you to meet with the fund company to discuss your requirements?
I'd save as much as you can into the scheme, especially since it is tax free savings (just so long as you don't withdraw before the age of 59 and a bit.
My employer (non profit) will put in 9%, provided I match at least 5% of my pay.
I don't know if I can afford to retire in 20 years, but I do intend to put as much as I can into the scheme over the years to at least try and get something of value. I doubt my UK pensions will cover the cost of heath care insurance in the USA when I do retire.
Did the company arrange for you to meet with the fund company to discuss your requirements?
#4
Re: 403(b) retirement plan
If you have a choice, it's better (IMO) to make the contribution pre-tax, to lower your total taxable income for the year. Why should Uncle Sam keep your money for the next 35 years? You keep it!
Rene
Rene
#6
Re: 403(b) retirement plan
In general, as everyone states above, pre-tax is the way to go. Investing sites will tell you that Roth is a good idea if you expect to be in a higher tax bracket after you retire. If you're in your 20s, unless you're working for dirt, that's going to be hard to reconcile. Perhaps if you're in a situation where you expect your tax return to refund you pretty much all your tax for the year, a Roth might make a lot of sense. Otherwise, the pre-tax 403(b) is probably the way to go. And if you can't work it out, just go with the pre-tax.
As for the annuities vs mutual funds, not really sure. I have an old 403(b) and I vaguely remember sales-type people trying to convince me of annuities. That made me very suspicious and pushed me to mutual funds. Maybe it's unjustified, I don't know. But you'll read a lot about fees on retirement investments - anything involving traveling salesmen can't be too low on fees.
As for the annuities vs mutual funds, not really sure. I have an old 403(b) and I vaguely remember sales-type people trying to convince me of annuities. That made me very suspicious and pushed me to mutual funds. Maybe it's unjustified, I don't know. But you'll read a lot about fees on retirement investments - anything involving traveling salesmen can't be too low on fees.
Last edited by AdobePinon; Aug 15th 2018 at 5:22 am.
#7
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Joined: Apr 2017
Posts: 901
Re: 403(b) retirement plan
403(B) is the non profit version of the 401(K).
I'd save as much as you can into the scheme, especially since it is tax free savings (just so long as you don't withdraw before the age of 59 and a bit.
My employer (non profit) will put in 9%, provided I match at least 5% of my pay.
I don't know if I can afford to retire in 20 years, but I do intend to put as much as I can into the scheme over the years to at least try and get something of value. I doubt my UK pensions will cover the cost of heath care insurance in the USA when I do retire.
Did the company arrange for you to meet with the fund company to discuss your requirements?
I'd save as much as you can into the scheme, especially since it is tax free savings (just so long as you don't withdraw before the age of 59 and a bit.
My employer (non profit) will put in 9%, provided I match at least 5% of my pay.
I don't know if I can afford to retire in 20 years, but I do intend to put as much as I can into the scheme over the years to at least try and get something of value. I doubt my UK pensions will cover the cost of heath care insurance in the USA when I do retire.
Did the company arrange for you to meet with the fund company to discuss your requirements?
I have had a roth 403b plan in the past, now rolled into a roth IRA once I moved to a for-profit organisation. I do not know your circumstances, but whatever plan I am offered, I max out my contributions, especially since I intend to stay in the US and retire here. Currently my max is $5500 (roth ira), my old 403b I believe was circa $18000.
Never too early to start saving for retirement!
Never too early to start saving for retirement!
In general, as everyone states above, pre-tax is the way to go. Investing sites will tell you that Roth is a good idea if you expect to be in a higher tax bracket after you retire. If you're in your 20s, unless you're working for dirt, that's going to be hard to reconcile. Perhaps if you're in a situation where you expect your tax return to refund you pretty much all your tax for the year, a Roth might make a lot of sense. Otherwise, the pre-tax 403(b) is probably the way to go. And if you can't work it out, just go with the pre-tax.
As for the annuities vs mutual funds, not really sure. I have an old 403(b) and I vaguely remember sales-type people trying to convince me of annuities. That made me very suspicious and pushed me to mutual funds. Maybe it's unjustified, I don't know. But you'll read a lot about fees on retirement investments - anything involving traveling salesmen can't be too low on fees.
As for the annuities vs mutual funds, not really sure. I have an old 403(b) and I vaguely remember sales-type people trying to convince me of annuities. That made me very suspicious and pushed me to mutual funds. Maybe it's unjustified, I don't know. But you'll read a lot about fees on retirement investments - anything involving traveling salesmen can't be too low on fees.
Also, I'm thinking of setting up a HSA with some of what I would put into my retirement fund. Is this advisable/a good thing to do?
#8
Re: 403(b) retirement plan
Does your insurance plan have an HSA? Are you on the high deductible plan?
I have an HSA and I love it. I know that money for medical expenses is there, and in the long run it's my money to keep.
Rene
I have an HSA and I love it. I know that money for medical expenses is there, and in the long run it's my money to keep.
Rene
#9
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Re: 403(b) retirement plan
I can either take the more expensive, low deductible one and have no option for a HSA due to the deductible being just under the limit. Or I can pay the cheaper health insurance (1/3 of the price of the low deductible plan) and open a HSA if I so wish. I have no health conditions or issues, I am only in my 20's and there are no genetic illnesses I may need to watch out for. My only 'health' issue is my hearing loss but that'll all come out of pocket as insurance doesn't cover that. Is it probably worth taking the cheaper health insurance and opening the HSA, and invest the maximum amount I can?
#10
Re: 403(b) retirement plan
I can either take the more expensive, low deductible one and have no option for a HSA due to the deductible being just under the limit. Or I can pay the cheaper health insurance (1/3 of the price of the low deductible plan) and open a HSA if I so wish. I have no health conditions or issues, I am only in my 20's and there are no genetic illnesses I may need to watch out for. My only 'health' issue is my hearing loss but that'll all come out of pocket as insurance doesn't cover that. Is it probably worth taking the cheaper health insurance and opening the HSA, and invest the maximum amount I can?
Rene
#11
Just Joined
Joined: Nov 2017
Posts: 27
Re: 403(b) retirement plan
Congratulations on the job and you've got great advice on the pension fund. But I'm surprised you applied and interviewed for a job before your EAD arrived. I've been told that's a breach of immigration/visa laws. Also how long did your EAD application take?
#12
Re: 403(b) retirement plan
Rene
#13
Just Joined
Joined: Nov 2017
Posts: 27
Re: 403(b) retirement plan
thanks Rene, but surely with the crazy 4-8 month wait for the EAD it’s a bit off to apply and interview for jobs until you have it in hand? Our solicitors told me that I had to wait until I had the card physically in hand before applying/interviewing .
#14
Re: 403(b) retirement plan
Aren’t you and Maste under different circumstances? He is married to a USC. Perhaps that is the difference.
#15
Just Joined
Joined: Nov 2017
Posts: 27
Re: 403(b) retirement plan
That probably does make a difference. I think there are many of us being driven crazy waiting for the EAD to continue with our careers, I was hoping their was a way to fast track it but probably not in my case.