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Money, Business & Finance Ground >> Roth IRA vs 403(b) Annuity


4/9/09 11:38 AM
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kungfugrip
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General question: Which would be better investment for retirement, money into a roth IRA investing in Mutual Funds or 403(b) annuity?

Any benefits using the 403(b) over the roth IRA?

Details: I already have a retirement acct thru the school that i contribute 7.75% into, school matches that. I'm looking to increase my total retirement to 15%. I was planning on investing the remaining 8% into a roth ira, investing in mutual funds. The school is having an meeting with a 3rd party 403(b) consultant to discuss the 403(b)annuity option.

is this going to be a better option the the roth ira?

I'm guessing this might be too little info, if so ask and I can try to add info.
4/24/09 9:14 PM
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panic686
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You can only invest up to a certain amount in a Roth IRA per year. However, it grows tax deferred and that is a huge benefit.

The bad thing about both of those is that you will pay a 10% penalty on each of them if you withdraw funds before you are 591/2.

If you want an investment vehicle without that 10% penalty then you are better off using a mutual fund. In that case you can invest more efficiently for the near and intermediate future.

Where do you live?
4/29/09 9:33 PM
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Worth
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You can withdraw all your contributions prior to 59 1/2 from a Roth without a 10% penalty.
8/26/09 11:01 PM
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koreviewz
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 Ummm, it depends.  If the 403b allows for pretax contributions, that is your best bet.  But I'm not a huge fan of annuities for retirement investing.  They are low yield.  It all depends on your age I guess. 

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