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Open a Roth or continue with 457 plan?
Posted on 4/28/14 at 11:01 am
Posted on 4/28/14 at 11:01 am
I'm a Louisiana state employee. In addition to LASERS, I have been contributing to a 457 plan (pre-tax deferred compensation retirement plan). I want to up my contributions and was wondering if it would be beneficial for me to open up a Roth IRA and contribute to that instead. From what I understand (which is little), they are basically opposites.. in that Roth money gets taxed now and not upon withdrawal.
I am in engineering. 26. $55k salary. I do not forsee myself staying with the state forever, but maybe for the next 3-5 years.
Do the benefits of one plan outweigh the other? Should I have both? Any advice is appreciated. There is no penalty for early withdrawal under the 457 plan, but I do not plan on touching this money until retirement anyway. TIA.
I am in engineering. 26. $55k salary. I do not forsee myself staying with the state forever, but maybe for the next 3-5 years.
Do the benefits of one plan outweigh the other? Should I have both? Any advice is appreciated. There is no penalty for early withdrawal under the 457 plan, but I do not plan on touching this money until retirement anyway. TIA.
2
Posted on 4/28/14 at 11:41 am to PhiTiger1764
Do both.
Posted on 4/28/14 at 12:17 pm to PhiTiger1764
I am a retired State Employee who contributed to a 457 plan for a long time and also did DROP,. Now that I am retired, I really wish I had done a ROTH either in lieu of the 457 or along with it.
If I want to withdraw money now from my either plan, they withhold 20% of whatever I withdraw to make sure the federal taxes are covered! Plus, it adds to my gross income for the year.
In about 10 years I will have to take mandatory distributions. I probably need a financial advisor to help me develop a plan to get the money out of both accounts.
If I want to withdraw money now from my either plan, they withhold 20% of whatever I withdraw to make sure the federal taxes are covered! Plus, it adds to my gross income for the year.
In about 10 years I will have to take mandatory distributions. I probably need a financial advisor to help me develop a plan to get the money out of both accounts.
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