whitewitch
Confused about dryer sheets
- Joined
- Apr 1, 2021
- Messages
- 8
Hi, I am new to this community and hopefully my questions do not sound stupid. I've searched tons of websites and searched in this forum, but I am still not sure whether my decision is good and hope anyone who has done it could give me some advice.
My questions are:
1. based on this website, especially the example in the paragraph "The Power of this Strategy" and "Tax-free 401(k)", if I put my money in 403b (pre-tax), I could have early withdraw by converting to a traditional IRA, then transferring to a Roth IRA after I separate from my employer. After 5 years pass, I could withdraw the first conversion without paying any tax or penalty. Am I right? This strategy definitely applies to 403(b), right?
2. Based on the same article, it suggest people to fund pre-tax 403b first because that will end up more money (like the investor A in the example) in the end. Does this make sense to you?
I am in the tax bracket of 12% together with my husband. I have enough cash on hand before my husband finds a job. Instead of investing in the stock market that might be taxed again, I am thinking to put all my salary after expense to max out 403(b) and (roth)IRA to save on tax based on the strategy from the first question. And my plan is maybe one day, we could retire early and have access to our retirement account without any penalty. Am I too naive on this? Is there anything/fee that I am not aware of?
I am sorry my question might sound too elementary or stupid. This is my first time having a retirement account in US. Depositing that much of money in an account that I am not able to withdraw freely makes me nervous. I really would like to plan any possible outcome so I don't wind up losing them. Thank you in advance
My questions are:
1. based on this website, especially the example in the paragraph "The Power of this Strategy" and "Tax-free 401(k)", if I put my money in 403b (pre-tax), I could have early withdraw by converting to a traditional IRA, then transferring to a Roth IRA after I separate from my employer. After 5 years pass, I could withdraw the first conversion without paying any tax or penalty. Am I right? This strategy definitely applies to 403(b), right?
2. Based on the same article, it suggest people to fund pre-tax 403b first because that will end up more money (like the investor A in the example) in the end. Does this make sense to you?
I am in the tax bracket of 12% together with my husband. I have enough cash on hand before my husband finds a job. Instead of investing in the stock market that might be taxed again, I am thinking to put all my salary after expense to max out 403(b) and (roth)IRA to save on tax based on the strategy from the first question. And my plan is maybe one day, we could retire early and have access to our retirement account without any penalty. Am I too naive on this? Is there anything/fee that I am not aware of?
I am sorry my question might sound too elementary or stupid. This is my first time having a retirement account in US. Depositing that much of money in an account that I am not able to withdraw freely makes me nervous. I really would like to plan any possible outcome so I don't wind up losing them. Thank you in advance