Roth 403b contributions

[frugalgirl]

I just started a new job and am in the midst of trying to decide how to allocate my retirement contributions to the employer's 403b plan. I plan to contribute the government max ($16,500) in total. The plan offers a Roth fund within the 403b.

Some other info:
1. Our Adjusted Gross Income will be over the $160k limit for Roth contributions outside an employer plan (at least that is how I understand it).
2. We will fall into the 28% federal tax bracket.
3. We are in our early to mid 40's and have about 500k combined in retirement savings in our current (DH) and my old 401k.
4. The employer contributes a percentage of our salary to the retirement plan whether or not we contribute ourselves.
5. DH also contributes the max in all tax-deferred investments.

I'd like to put some money into the Roth. Neither of us will have a pension in retirement and I think we should diversify our tax liability even though we are in a fairly high tax bracket now. I feel that taxes will increase in the future.

What do you suggest for me? How much, if any, would you all put into the Roth?

[Petunia 100]

If it were me, I would definately start shoveling some money into a Roth vehicle. Is all of your 500k retirement savings in tax-deferred accounts? If so, you might consider designating ALL of your contributions into the Roth and let DH do the tax-deferred. If you don't want to do that much, then consider doing at least half.

[MonkeyMama]

I'd put the full $16,500 in the ROTH.

If you are going to put $16,500 in either way, sure, you will pay taxes on the $16,500, now, but if you invest well for decades, all those returns will be tax free. The longer your investing horizon, the better you will make out. Plus, tax breaks like the ROTH are extremely rare, and won't last. Take advantage while you can. (There are loads of other ROTH benefits, too).

The problem with most analysis you see about ROTH vs. Traditional plans is that they assume you can't afford to max out without the immediate tax break. (So they will usually compare like an annual $12k ROTH contribution to a $16k traditional contribution. Surprise, surprise - then the traditional always wins). Sure, if money is tight and you could put more away with the immediate tax break - the traditional option may make more sense. But, if you are going to max out either way - do the ROTH.

[frugalgirl]

Thanks for the replies. I really appreciate the input.

I am definitely going to put in the max contribution and was already seriously considering putting my entire $16,500 into the Roth. All of our current combined savings is in tax deferred accounts so we have no tax deferred savings.