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Personal Investments • 401k and 457 options with state pension

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Emergency funds: Currently have 1 months of expenses and are working up to 3 months.

Debt: Mortgage, 4.375% interest; recently paid off moderate credit card debt

Tax Filing Status: Married Filing Jointly, 1 kid, planning on 1 more in the next 2-4 years

Tax Rate: 22% Federal, 0% State

State of Residence: Texas

Age: 32

Current retirement assets
Total portfolio is currently low four-figures

My 401k (grandfathered in, even though employer is a state agency)
75% BlackRock LifePath Index 2055 F (0.080%)
No company match

Husband's Simple IRA at Schwab
25% Schwab Mid-Cap Index (SWMCX) (0.040%)
Employer contributes $50 monthly

I also have a (non COLA) state pension with an estimated monthly annuity of $5,100, but that is likely to increase as my current salary increases (based on average of highest 60 months of salary). Current average monthly expenses are $7,200. We imagine having a similar lifestyle upon retirement, but that's 30+ years away so it's hard to truly estimate. I am still eligible for social security and so is my husband.

Questions:
My employer offers both a 401k and 457 (governmental) administered through Texa$aver and I can contribute either pre-tax or Roth for both. Both accounts charge $1.50 monthly fee per participant, per account regardless of account balance. Investment options are the same for both 401k and 457.

1.Should I also be utilizing the 457 in addition to the 401k? If so, how should my contributions be allocated percentage wise?

2.I'm currently contributing pre-tax, but think I may need to switch to Roth. I've read through Traditional vs. Roth, and it seems like I fall into the recommendation for a partial or total Roth contribution
Investors who expect to have sources of significant taxable income in retirement (pensions, royalties, real estate income not sheltered by depreciation, annuity income, Inherited IRAs, etc.)
If I should switch to Roth contributions, how much percentage wise should they be?

Statistics: Posted by IncreasingEntropy — Sat Nov 02, 2024 5:16 pm — Replies 2 — Views 222



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