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Old 08-15-2014, 10:27 PM
 
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I'm a 20-something and just started a job with the local government. They offer Roth/pre-tax 401k, roth/pre-tax 457 and Roth/traditional IRA. However, they do not provide matches for any contributions to the 401k or 457. Opening an IRA with the government is cheaper as far as fees are concerned compared to IRAs outside of the government. Investment options for the 401k/457 and IRA are exactly the same. Is there any difference between the Roth 401k/457 and Roth IRA in my case, besides the maximum difference of $17,500 vs $5,500 for 2014 and that the 401k/457 is deducted directly from my paycheck, especially since it's purely all my contributions? In other words, is it still worth opening the Roth IRA? I already know what the difference between the 457 and 401k is. I just don't imagine that I will max out on 401k, 457, and IRA combined. I am currently contributing 5% to the roth 401k and 5% to roth 457 as well as 5.75% pension. Thanks.
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Old 08-15-2014, 11:12 PM
 
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Also if more info is needed to answer my question, please let me know . This is the internet, so I only want to reveal what's necessary.
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Old 08-15-2014, 11:17 PM
 
Location: MMU->ABE->ATL->ASH
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So if i read this right, there is no match.
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Old 08-15-2014, 11:19 PM
 
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Quote:
Originally Posted by flyonpa View Post
So if i read this right, there is no match.

Correct, there is no match.
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Old 08-16-2014, 04:37 AM
 
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At your age roth is the best deal. What folks leave out when deciding is this fact.

Most careers ramp up up in salary over decades of time.

By the time you are at your pre-retirement years and max pay you have decades of lower income years averaging out your income to a lot less and your tax brackets go with it.

Odds are your tax bracket in retirement will be higher then the average tax bracket spawning from those decades of ramping up in income.

You can have as much as 20% more income in retirement just from starting a roth at your age and that has nothing to do with tax free compounding either.

Also at 70-1/2 you have no rmd's to deal with as well as investments can still compound tax free. With traditional ira's you lose the tax free compounding on what you are required to withdraw.

Most folks miss these two issues when deciding which way to go and get to wrapped up in just looking at their final years tax brackets and not their career average.
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Old 08-16-2014, 07:53 AM
 
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Quote:
Originally Posted by mathjak107 View Post
At your age roth is the best deal. What folks leave out when deciding is this fact.

Most careers ramp up up in salary over decades of time.

By the time you are at your pre-retirement years and max pay you have decades of lower income years averaging out your income to a lot less and your tax brackets go with it.

Odds are your tax bracket in retirement will be higher then the average tax bracket spawning from those decades of ramping up in income.

You can have as much as 20% more income in retirement just from starting a roth at your age and that has nothing to do with tax free compounding either.

Also at 70-1/2 you have no rmd's to deal with as well as investments can still compound tax free. With traditional ira's you lose the tax free compounding on what you are required to withdraw.

Most folks miss these two issues when deciding which way to go and get to wrapped up in just looking at their final years tax brackets and not their career average.
Exactly, which is why every retirement plan I am investing in is a roth basis. Roth 401k and Roth 457 right now. My question is, should I still open up the Roth IRA as well with my employer when the investment options are exactly the same as the Roth 401k and Roth 457, even though I already don't imagine that I will reach the maximum of $17,500 each in the 401k and 457 (no employer matches). Like I said, my employer's Roth IRA fees are less than those charged "outside" so I prefer to stick to my employer for now if I do open one. Again, all my own contributions.

The only thing I could think of that opening the Roth IRA alongside the Roth 457 and 401k is beneficial is if I were to leave my current employer and worked for somebody else who didn't offer an IRA option. Thoughts?
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Old 08-16-2014, 07:59 AM
 
Location: N/A
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Quote:
Originally Posted by palmera45 View Post
Exactly, which is why every retirement plan I am investing in is a roth basis. Roth 401k and Roth 457 right now. My question is, should I still open up the Roth IRA as well with my employer when the investment options are exactly the same as the Roth 401k and Roth 457, even though I already don't imagine that I will reach the maximum of $17,500 each in the 401k and 457 (no employer matches). Like I said, my employer's Roth IRA fees are less than those charged "outside" so I prefer to stick to my employer for now if I do open one. Again, all my own contributions.

The only thing I could think of that opening the Roth IRA alongside the Roth 457 and 401k is beneficial is if I were to leave my current employer and worked for somebody else who didn't offer an IRA option. Thoughts?
For your age...the max Roth is $5,500 for 2014...doesn't matter where you put it.
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Old 08-16-2014, 08:01 AM
 
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I know that maximum is $5500 for IRA. The $17,500 is for 401k and 457 each.
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Old 08-16-2014, 08:04 AM
 
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My question is should I open the roth IRA with my employer even though I don't think I will max out on the 401k ($17,500), 457 ($17,500) with the same investment options? Sorry, I'm just really getting frustrated that no one is answering my question and reading my first post. I already know the limits and that roth is better for me at my age.
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Old 08-16-2014, 08:06 AM
 
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My opinion is get that roth 401k going and contribute some while concentrating locking in a pension
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