Max 401k or start Roth IRA with pension?

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  • #93289 Reply

      Looking for some advice. I started off my government job right out of high school, about 16yrs ago. I didn’t have much financial advise but started contributing 10% to my 401k since day 1. I am matched up to 5%.

      Over the 16yrs I have gone from a GS 2 to now GS 13. I am 34 now With 2 kids in many sports activities I plan to max out my 401k in the next 2-3years (I have about 160k in my 401k at the moment) Should I max my 401k or keep 10% in the 401k and start a Roth?

      I like what I do and plan to work til 57. At 57 I’ll have 40yrs and my pension will give me an additional 40% of my high three salary, if I stay til 62, my pension will go up 50%.

      #93290 Reply

        it sounds like it won’t really matter. You started so young contributing to retirement plus you have a pension. You should be just fine at retirement.

        #93291 Reply

          Do you have a pension as well as a TDP/401k? And then do you mean 401k (which is for private companies), or do you mean TSP (which is what most federal employees, like GS employees, get)? And then lastly, what’s your salary – that is the biggest point of difference between starting a Roth IRA vs a Traditional IRA.

          #93292 Reply

            Do you mean TSP instead of 401(k)?

            I’d put enough in my pre-tax TSP to get the match, then max out a Roth IRA next. If you have anything left after that, consider Roth TSP contributions up to the annual max.

            Have you seen: Roth vs. Traditional 401k: Which is right for me?

            #93293 Reply

              I would personally max it out if you can afford that money. Roth vs traditionally look at what your tax outcome is.

              If you play smart putting money in traditionally vs Roth is basically the government giving you free money because of the tax relief.

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