Roth IRA vs 403(b) Plan

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ps56k
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Roth IRA vs 403(b) Plan

Post by ps56k » Tue Feb 17, 2015 6:24 pm

Our son is a grad student - and last year I setup a Vanguard Roth IRA for him.... and funded it :moneybag
His univ also has a 403b plan avail, non-matching - but he hasn't setup anything as yet.
So, was wondering, if you only have limited cash resources, which deferred account would you contribute to ?
Don't really need to "reduce" the IRS AGI at this point, so just keep status quo with only funding the IRA ?

Roth IRA or 403b Plan

DSInvestor
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Re: Roth IRA vs 403(b) Plan

Post by DSInvestor » Tue Feb 17, 2015 6:26 pm

If your son does not need the Traditional 403b tax deduction, and the 403(b) does not have a match, he should max out his roth IRA first.
Last edited by DSInvestor on Wed Feb 18, 2015 11:18 am, edited 1 time in total.
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abuss368
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Re: Roth IRA vs 403(b) Plan

Post by abuss368 » Wed Feb 18, 2015 9:22 am

Considering he does not need the tax deduction, I would consider maxing the contributions to the Roth IRA. A simple Target retirement fund designed by Vanguard experts would be ideal.

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ps56k
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Grad Student vs Roth IRA contribution/funding

Post by ps56k » Thu Aug 30, 2018 6:10 pm

Just thinking about this old thread - and I may have posted a similar question elsewhere....

Grad student vs IRA full contribution - how ???

Our son is a Grad Student - and gets a stipend of around $30k .... which he lives on out in Pasadena, California -
To fully fund his Vanguard Roth IRA, he would need $5,500 - or about 18% of his $30k stipend.
Just to share, his rent out in LaLa Land is around $1,000 - or about 43% of his $30k stipend - so it is a tough act to balance spending out there...

SO - for those with not a lot of income, what kind of percentage should be allocated to funding your IRA ?
Since - you can't go back to previous years - and yet - you don't have the total funding now....
It would be interesting to see a comparison, between the percentage of income vs level of funding an IRA for different levels of income.
BTW - yes - I have totally funded his Vanguard Roth IRA since I set it up - when he had enough "earned income" to qualify for the contribution.

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FiveK
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Re: Grad Student vs Roth IRA contribution/funding

Post by FiveK » Thu Aug 30, 2018 7:04 pm

ps56k wrote:
Thu Aug 30, 2018 6:10 pm
SO - for those with not a lot of income, what kind of percentage should be allocated to funding your IRA ?
It's difficult to define what "should be" done.

Perhaps, "as much as he can afford while not sacrificing health due to substandard food, clothing, and shelter"?

blastoff
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Re: Roth IRA vs 403(b) Plan

Post by blastoff » Thu Aug 30, 2018 7:07 pm

I saved 7-8.5k a year making 25-27k in grad school.

Have a roommate. Wasn't a super low cost area, but not NYC or Bay area either.

I still did stuff.

gostars
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Re: Roth IRA vs 403(b) Plan

Post by gostars » Thu Aug 30, 2018 10:40 pm

If the 403(b) has a Roth option, that might be the best, at least if it has good fund choices and no fees besides fund ERs. Higher contribution limit than an IRA, and for many it's easier to deal with a smaller paycheck due to a payroll deduction than it is to watch money constantly drained from the bank to fund the IRA.

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Earl Lemongrab
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Re: Roth IRA vs 403(b) Plan

Post by Earl Lemongrab » Fri Aug 31, 2018 4:53 pm

Just a check, but many graduate stipends are not qualifying income for IRAs. Has he verified that he can make contributions?

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