Does the Roth 403B make sense for me?

[onthego]

Long time occasional lurker, but first time poster.

I'm 58 and planning to retire in 4-8 years. I will have a comfortable pension, but my workplace has also offered a good 403B program that I've contributed to for quite a long time. Now I also have the option of a Roth 403B for the first time, but I can't figure out if it makes sense for me to start directing my contributions to the Roth option since I'm pretty close to retirement. The money won't have as long to grow tax free.

On the other hand, if I leave the traditional 403B money alone and start building a Roth 403B, maybe I could start drawing off the traditional dollars first when I need to after I retire, and leave the Roth dollars alone as long as possible without touching it. Then would it make better sense to start contributing to the Roth version?

In case it matters, I do have a Roth IRA and a smaller traditional IRA too.

Feeling confused about what to do, and I'm not totally clear on what I should weigh as I decide. Hoping you guys can give me your thoughts on it. Thank you so much!

[hemoglobinRed]

okay dokie

"The money won't have as long to grow tax free"

That is true, but if that is your concern then you might as well stop saving completely because every dollar you continue to save, no matter the vehicle you choose, won't have the same time-growth potential. Putting $1 into an account already containing a million doesn't give that $1 any more time.

Where you planning on maxing out your current roth? If so would you like to go above the roth contribution limits? If so then use the 403b roth.

Really the decision to use pretax or post tax vehicles is based on what you think your future tax bracket is, how you thing the tax brackets might change, and like you mentioned the required minimum distribution time frame.

[bennkar]

One thing you may want to consider is that you may not be able to only withdraw non-Roth403b money in retirement. Many plans (mine included) will only allow you to withdraw funds in proportion to the ratio of Roth/Non-Roth balances . Sorta sucks, but you can just withdraw enough to cover your needs from the non-Roth Portion, and put the excess Roth funds directly into your Roth IRA to avoid losing the future tax-free earning potential.

To avoid this I will be doing some strategic withdrawals and conversions to Roth after I retire but before I have to take SS payments (70 y.o.). Due to having a decent sized pension, and SS payments, I want to get my non-Roth funds as small as reasonable before RMDs kick in. Because if I don't, my taxes could go through the roof.

Anyway, to the original question, I am doing over 60% of my 457 plan contributions as the Roth kind. I can afford it, and I figure my other option would be to take slightly more home and put it into my brokerage account. I don't see that as any better than Roth contributions, so I just go with that plan. YMMV