Personal Investments • Traditional vs ROTH (IRA + 403b)

As someone who is going to start her career soon and new to all of this, how do I decide on whether to use traditional vs ROTH IRA + 403b?

I recently got hired as a nurse in SoCal, but the pay is relatively low compared to most hospitals ($44.15 for 1 year, then goes to $48.15). I plan to stay for a few years to get my 100% vested 401a [discussed in my other post], but will then leave to find a higher paying job as I live in a HCOL area.

Based on my readings and the little knowledge I have:

• • It seems that a traditional IRA are for those who are in the higher tax bracket but expect to be in a lower bracket near retirement.
  • ROTH IRA are for those who are in the lower bracket, but expect to be in a higher bracket.
  • But I also know that there’s like a certain tax bracket you must be above or below that influence the decision to choose ROTH vs traditional
  (I hope that I got the gist of it)!
  
  So based on my situation, should I opt for the ROTH Ira? I’m not planning on finding jobs that pays low due to HCOL, so it would make sense to open a ROTH IRA, right? But I think based on my current wage/taxable income I would be within the .. 22% bracket (I think) - but I heard that’s for traditional? Or am I missing something?
  
  
  And then there’s the 403b that I get from my hospital. The concept for the IRA should be the same for the 403b, right? If so, then should I also be applying for the ROTH 403b since I’m expecting a pay increase from $44.15 to $48.15 in about a year.
  I had talked with the HR specialist, and she told me to do the traditional 403b, but someone on my other post had said to do the ROTH 403b . So I am very confused right now.
  
  Any advice/help is greatly appreciated!!
  
  
  Edit: I am single household and I typically work 36hr/week (3 days - 12hr/each) unless I pick up shifts.

You won’t regret ROTH.

1) 5,000 into ROTH is a larger contribution than same into tax deferred. Yes you can invest savings but most people don’t.

2). It’s easier to pay taxes when working.

3) tax rates likely going up.

4). SS taxed lower if lower income, ACA credits easier to qualify for and IRMAA easier to avoid. These things are so far away for you but ROTH makes tax planning easier in retirement.

The big plus for tax deferred is avoiding CA income tax. If you ever move out of CA to low tax you can convert then.

Statistics: Posted by BitTooAggressive — Tue Sep 17, 2024 2:34 am — Replies 4 — Views 129

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