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Help me decide

March 5th, 2019 at 04:59 pm

Two things I am pondering:

What to do with my 403B as of July 1, 2019 when I can no longer contribute through payroll deductions? Roll it to my Roth IRA? Is there a better option?

My husband's truck is a 2008. We still have full coverage insurance. When does it makes sense just to have liability insurance on this vehicle? We looked it up and it's worth between $5K-$7K.

5 Responses to “Help me decide”

  1. creditcardfree Says:

    Rolling a 403B into a Roth IRA would create a taxable event. If you want to avoid taxing that money you would want to roll over into Rollover IRA. If you are referring to how the money is invested and you like the same investments you have your Roth in, you can pick that same fund(s) to invest your Rollover IRA in as well.

    I'm guessing your fees with the 403b are higher than what you have your Roth invested in, but it would be good to check. If the fees are reasonable and you like your fund choices you can leave your 403b with your employer, as long as you have at least $5K invested (which I'm guessing you do).

  2. Jenn Says:

    If you're a good driver and have a healthy enough EF to replace the truck in the event that you totaled it, I think you should dump the comprehensive coverage. Then decide whether the premium savings should be used to raise your liability limits and/or supplement your savings or investments.

  3. Dido Says:

    1. Roll to a traditional IRA, not a Roth, for continued tax deferral, lower fees, and a wider variety of investment choices. If your taxable income is down, you can do Roth conversions over a few years to build up a tax-free bucket of money while minimizing taxes. The younger you are than 70.5, the more this will have long-term benefit. Once required distributions begin at 70.5, Roth conversions make less sense.

    2. A rule of thumb on dropping collision and comprehensive is to drop when the premium is 1/10th of the value of the car.

  4. rob62521 Says:

    I took my 403b that wasn't paying squat (long story, but basically it was one of 5 companies that the company the district hired to handle this and it was the lesser of the other 4 evils) and rolled it into a traditional IRA. Don't be surprised if you have to have the district send a letter stating you aren't going to be paying into the 403b and are retiring. That is what I had to do.

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