Supplementing pension ideas

[Schneed10]

Originally Posted by onlydarksets

Great post, Schneed. One exception to this is if you have job hopped, and you have a few 401(k)s out there. It could make sense to roll them into a single IRA to make it easier to manage. Personally, I can barely keep up with my traditional IRA, Roth IRA, 401(k), TSP, and taxable savings (not to mention my wife's plans). What's your thought on that?

I would agree. There is no financial benefit to rolling your accounts over. There is also no financial "loss" from rolling your accounts over. So if it makes it easier to manage by consolodating accounts, go for it.

Originally Posted by onlydarksets

It also depends on how old you are. If you are younger, you want to pay your taxes now, not at retirement (because your tax rate is presumably lower now than it will be at retirement). In that case, you would contribute in the following order:
1. Max out your employer matching (i.e., if they match 4%, do that first)
2. Max out your Roth IRA
3. Max out your 401(k)

If you are in the middle of your career, I guess you would max out the 401(k), and then see if you are eligible for a Roth IRA.

Disclaimer: I have zero education in finance - this is advice I have received from others, and it seems to "make sense".

Yes it makes sense to me. Only change I'd make is that instead of evaluating this based on stage of career, I'd evaluate it based on the tax bracket you find yourself in. Which is kinda sorta saying the same thing anyway, because you tend to make more money in the middle of your career.

If your income is below the Roth limit, qualifying you to contribute to a Roth IRA, it is in your long term financial interest to do so rather than maxing out your 401K or 403b. However you give up cash flow in the present day, which can be an issue for some people. Ideal solution is find room in your budget, make spending cuts if possible, to make the Roth contributions.

If you make above the Roth limit, you're forced to max out your 401k/403b anyway. Which is still a good way to go.