BigMoneyJim
Thinks s/he gets paid by the post
Nobody's born an investing genius. And they don't teach you this stuff in school! You are well on your way to self-education and early retirement, so don't sweat it; give yourself time to learn.I am so dumb when it comes to investing.
That's really the kind of thing only you can figure out. There are two aspects to your question: "How much should I save?" and "How should I save?" As far as how much, there is no pat answer, but I like the advice I've seen echoed here a few times: Live below your means, save till it hurts and then back off a bit. Repeat as needed. You are saving way more than the average bear (who saves almost nothing) so you're ahead already.I know you have given me lots of advice here already, but would anyone tell me whether I should contribute more than 7% to my 403(b) plan or should I open some other account somewhere else.
For the "how/where to save" question, if I recall the "standard" priority list goes something like this:
1. Save enough to get maximum company match in 401(k) (or 403(b) or similar company-match plans)
2. Maximum yearly contribution to a Roth IRA. (currently $3000 or $3500 I think.)
3. Save to legal limit of 401(k)/403(b)
4. Have an emergency fund of X months in an accessible after-tax account.
5. After-tax savings. (Savings accounts, CDs, bonds, mutual funds, etc. in nonretirement accounts)
Myself, I am going to max my 401(k) before considering contributing to an IRA because it's less work, the taxes are pre-adjusted and I can't goof it up by procrastinating or having the money burn a hole in my pocket as could happen with my saving for an IRA/Roth IRA and then investing later. This is an example of fitting the savings plan for personal situations: I'm lazy and procrastinate a lot.
Occasionally I've seen it argued that there are benefits to investing in after-tax accounts before maxing out retirement accounts. The benefits have to do with the accessibility of the money and the lower captial gains taxes. I haven't seen that discussion lately though. Again, for myself I know from experience that I'll be tempted to use that money if it's not locked away in a penaltied-withdrawal retirement account.
I know some of the answers are confusing for now, but rest assured you can get that money penalty-free before age 60 and age 55 if you retire before then, so adding more to your 403(b) doesn't lock the money away until you're "really old".Note, I want to be able to retire early and with the 403(b) plan I can't touch that money until I am really old.
You could roll the 403(b) over when you quit your job or retire. You can roll into a regular IRA or a Roth IRA. You probably also have the option of leaving the 403(b) as is with TIAA-CREF. Don't let this confuse you, though; these are just future options to investigate.Someone mentiones about rolling it to Roth IRA, but I am not sure if I qualify for that. If so, when would I do that and where can I calculate how much money I will have in about 10 years?
A Roth IRA is a set of rules, just a different set of rules from the 403(b). You would very likely keep your same investments so the returns would be the same. The thing with the Roth IRA is the taxes; if/when you roll over to the Roth you pay income taxes on the amount rolled over. Ideally you avoid drawing from your assets to pay the taxes because that's a penaltied withdrawal.
After quitting my last two jobs I rolled over my 401(k)'s into a regular IRA because 1: I want full control of my money and the 401(k) plan had limited investment options; and 2: because I didn't have the money to pay the taxes for a Roth conversion.
(post interrupted by some phone calls...if this post doesn't make sense I'll come back and fix it later)