m...@g...com wrote:

> All,
>
> I've been lurking for quite some time since my last posts, but not
> have reason to pose a question. I just received my benefits
> information from my employer yesterday and I noted that starting in
> 2009 they will have a Roth 403b. I have been fully funding my and my
> wife's Roth IRAs for years and putting 11% of my gross income into my
> 403b. I am 41 1/2 years old and my employer still (surprisingly)
> provides a defined benefit pension plan. What are the pros and cons
> of switching to the Roth 403b?

I've gone on a bit about how Roth accounts and Roth conversions are
beneficial to a select few people, or limited circumstances.

For you, it may be ideal. The simple reason it doesn't benefit most
working people is that it takes quite a bit of savings, pretax to put
you back in the same or higher tax bracket as when you were working. But
I do offer that those who have a great defined benefit plan are among
those who may be candidates for Roth accounts.

I suggest looking at http://www.fairmark.com/refrence/index.htm and
understanding the tax bracket you are now in. That's a fact, your
current tax rate. The rest is forecasting, your employer (will you stay
there? will they continue to offer the plan?) your income and savings
level, and future tax rates. As your pension gets closer to replacing
final income by a larger percent, the numbers favor Roth. Do you see
why? If the pension replaced your income 100%, any additional income is
taxed at the same or higher rate.

Of course, this doesn't address your wife's income, 401(k), or other
savings. If you post some numbers, many will be happy to offer more advice.

Joe

www.blog.joetaxpayer.com

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.