Planning my wifes retirement?

[daftearl]

Im 27, the Mrs is 26. Im in TSP and all my stuff is squared away thanks to all you guys' info. My quandry is this.

My wife is a state employee and her pension is set up much like FERS. The agency she works for however does NOT offer a match for 401k plans. She has the following options, all payroll deducted.

401k
457
ROTH 401k

Of course we have the option of doing it ourselves and having every option for investing as opposed to her plan choices which offer 27 different funds.
We already have a roth IRA and a early stages portfolio with a mutual fund. I would like to know what you guys would do.

 

[Birchtree]

Take the Roth 401K and when you've got a fair balance shoot the heck out of it when you are ready. It'll all be tax free down the road with no required minimum distribution. You'll have so much more flexibility when it counts. Maybe some day the State will offer her a defined contribution plan like my wife has. It works basically the same as TSP only the employer makes the contributions and the whole balance is available upon retirement - no stinking annuity to mess with.

 

[GGal]

Hello Daft,

Are you a betting man? If so, do you bet that income tax rates are going to go up or not go up?

I would bet they will go up in the future. Someone's got to pay for the hole we're digging.

So, if income taxes go up, Roth might be the better choice in the long run......depending of course on your current income and taxable situation and what you're able to contribute.

In my case, the current temporary tax savings of my TSP contributions help fund the contributions. so it's a win-win.

GA

 

[daftearl]

Noted and appreciated! Thanks guys.

 

[Ed]

Im 27, the Mrs is 26. Im in TSP and all my stuff is squared away thanks to all you guys' info. My quandry is this.

My wife is a state employee and her pension is set up much like FERS. The agency she works for however does NOT offer a match for 401k plans. She has the following options, all payroll deducted.

401k
457
ROTH 401k

Of course we have the option of doing it ourselves and having every option for investing as opposed to her plan choices which offer 27 different funds.
We already have a roth IRA and a early stages portfolio with a mutual fund. I would like to know what you guys would do.

GA:

My thoughts:

1) First choice is to fully fund all three plans, if possible.
2) You both work and are early in your careers, so, your income will continue to rise. Fund the tax deductable accounts first and ROTH IRA last.