Retirement Contribution

[twest]

Hello everyone, I am wanting to increase our Retirement contributions for me and DH and need advice.

What we have:

Husband: Roth IRA with employer They match up to 6% and he only does 40/month
Traditional IRA where he contributes 250/month (this is with a local bank so I am not sure this was a good choice really)

Me: 403B where my employer contributes 10% no match just flat 10%
Annuity with my employer whre I contribute 50/month
Roth IRA I contribute 50/month

I understand that we need to contribute 15% not including what our employer does. Currently we contribute 390/month and want to raise that to around 810/month. My question is how should we do the additional money. Should we start with DH's employer match and then ? Should I max my Roth IRA or divide the additional money between accounts. Any help will be greatly appreciated. Also, if you could point me to any good books about investing I would appreciate that as well.

[twest]

Income is around 68000 per year. We are 35 and 39. Thank you

[riverwed070707]

Retirement is not my specialty, but definitely contribute enough to get the full match from his employer. That's free money! After that I would look at maxing a roth for each of you if you meet the income requirements and beyond that I will leave it to the experts to give you advice Good luck!

[disneysteve]

What we have:

Husband: Roth IRA with employer They match up to 6% and he only does 40/month
Traditional IRA where he contributes 250/month (this is with a local bank so I am not sure this was a good choice really)

Me: 403B where my employer contributes 10% no match just flat 10%
Annuity with my employer whre I contribute 50/month
Roth IRA I contribute 50/month

First thing you need to do is clarify a couple of things.

Your husband does not have a Roth IRA with his employer. IRAs are not employer-based plans. He most likely has a Roth 401k. If so, he should contribute enough to get the full company match. Any additional money should go into the IRA. I'm assuming your income is low enough to get the full deduction on the traditional IRA. If not, you should use a Roth instead.

His traditional IRA should be transferred to a low-cost no-load mutual fund company like Vanguard, Fidelity or T. Rowe Price. You will have far better investment options and lower expenses.

For you, you say your employer contributes 10% to the 403b but then say there is no match. That's terrific. Do they put the 10% in whether you contribute or not?

Annuities are almost always a rip-off. I would stop contributing to it and put the money in the Roth IRA instead.

[kv968]

First thing you need to do is clarify a couple of things.

Your husband does not have a Roth IRA with his employer. IRAs are not employer-based plans. He most likely has a Roth 401k. If so, he should contribute enough to get the full company match. Any additional money should go into the IRA. I'm assuming your income is low enough to get the full deduction on the traditional IRA. If not, you should use a Roth instead.

His traditional IRA should be transferred to a low-cost no-load mutual fund company like Vanguard, Fidelity or T. Rowe Price. You will have far better investment options and lower expenses.

For you, you say your employer contributes 10% to the 403b but then say there is no match. That's terrific. Do they put the 10% in whether you contribute or not?

Annuities are almost always a rip-off. I would stop contributing to it and put the money in the Roth IRA instead.

IMO I wouldn't contribute to the traditional at all. If you both make $68k/year and file jointly, you're currently in the 15% tax bracket. I don't think the tax savings you would get with contributing to the traditional would be worth it. I'd rather be able to take my money out tax free when I retire.

With that said, your husband should DEFINITELY at least be contributing enough to get the full match and if the choices and expense ratios in the 401(k) aren't bad, you may just want to put more money in there. Although most of the time your choices are somewhat limited and expensive with an employer program, sometimes they aren't that bad if the employer is big enough where you can get funds cheaper through them then you could on your own.

I do agree with Steve though in moving the traditional (whether you still contribute to it or not) to a mutual fund family like he described. Most banks are really weak when it comes to IRA's.

And I'd also agree with looking into that annuity. If you don't have to contribute to it, you'd most likely be better off investing it yourself in an IRA.

[twest]

Yea Steve I do have it pretty well myself. I don't have to put anything into my 403B and they do 10%. I had wondered about that annuity at work. I had heard some bad things from Suze Orman or Dave Ramsey maybe. I had never thought about stopping that but I may just stop it.

I had once thought of rolling over my husband's IRA to a Roth, but didn't know if that would be of any benefit to me since we had contributed to it for a few years now. I guess we would have to pay some tax on that if we rolled it over? Course it is not that much money at this time anyway.