Retirement??
I've talked to a few "financial advisors" and some tell me that i should invest in my 403b others tell me a Roth IRA then i've had others tell me i should invest in an annuity? I am a teacher who is still many years from retirement so what should I do?
Public Comments
- Invest in higher risks when you are younger. As you age move these accounts into more stable investments. Anything that avoids taxes is always good.
- Roth IRA. Your money is invested after you pay taxes on it. On the plus side, any gains you make from your investments are yours tax free. You can also take the money you invested in (but the your gains) out tax & penalty free at any time in the future.
- Well you can do all 3 if you like and have the money. Not knowing all your personal details makes me answer this question in a general way. Your 403B is a retirement program that works for teachers (And certain other professions) like the corporate world 401K. You can contribute far more to your 403B and everything you contribute is tax deductable. And ask your school or district if they match any part of your contribution, if yes, that is free money. You should probably max on the 403B first. No annuities. To expensive and they are redundant as your money is already deferred in your 403B, so all you would be doing is paying higher expenses. If you have money left over, then a Roth is good. You don't get to deduct it for your taxes, but it is tax free when you retire (59 1/2). Your 403B will have investment options into mutual funds. Pick a good blend of 3 or 4 fund types (Growth, Value, Balanced) and get started. Good luch.
- A 403(b) is a tax-sheltered annuity retirement plan, according to the IRS. They are not qualified retirement plans. 403(b) can only invest in mutual funds or annuities. A Roth IRA gives your more flexibility of choices to invest in. You can invest in bonds, mutual funds, CDs, money markets, and maybe even in companies' stocks. Both grows tax-deferred. If I were you, I would continue to put some money in the 403b and open a Roth IRA at one of the financial companies. I don't know what kind of investments you have in your 403(b) or whether you are satisfied with the performance. In Roth IRA, you have more flexibility of investment choices that can match your investment objective. As for annuities, I would only recommend it if you were in your 50's and really have nothing saved for retirement OR you maxed out your contributions to your 403(b) and Roth IRA, so an annuity would be a 3rd option.
- Don't invest in an annuity! Salesmen (not financial advisors) often promote these for retirement planning, but the truth is that you don't need one--and they can cost you thousands in fees. Invest your money; you have plenty of time. If you get a company/employer match, invest in your 403b enough to get the match. If not, I wouldn't bother with the 403b--just go straight to a Roth IRA. If you are young and/or if you don't make tons of money, then you don't need the tax deduction your 403b contribution (or a Traditional IRA) will give you. You'd be much better off with the non-taxabe gains and retirement withdrawals that your Roth IRA will offer. Plus you can always withdraw Roth IRA contributions tax and penalty free--anytime for any reason.
