Help! Which plan for retirement...

[Anonymous]

Hello,

I am trying to figure out which type of retirement plan I should open. I am a teacher (not in DC area) and have the mandatory contribution to the pension plan, which I believe is 3-4% right now. I opened a TDA and contribute 2% to it. I am still in graduate school and plan to up those when I am not paying for school every month.

However, when I find myself able to save more, I don't know if I should open an IRA- or a roth IRA... or something else. I know traditional IRA is tax-deferred and roth is not, but I don't know how to choose which is right for me. I am going to see if there are financial advisors available through our union, but I thought some of the more experienced people on here may have some good advice.

Yes, I have googled around and read about differences between these accounts, but I have not found how you can identify which is right for you. Perhaps if you share what you chose and why, I will be better prepared. I am single, no kids, mid 20s.

Thank you!

[Anonymous]

ROTH

[Anonymous]

And save for a down payment on a house.

[Anonymous]

There are pros and cons to each Roth and regular IRA. Go with Roth
-if you think your salary/taxes will be higher in retirement
-you want the money available just in case (Roth contributions can be withdrawn at any time with no penalites)
-if you want to balance out your risks as far as whether taxes will be higher in retirement or not (assuming your other retirement savings is pre-tax, this balances out your risks)
Go with Traditional IRA
-if you don't qualify for Roth
-if you think taxes will be lower for you in retirement
-you think the temptation to withdraw from the Roth will be too great for you.

[Anonymous]

Roth gives you more flexibility when you unexpectedly need money. You can withdraw your contributed amount without penalty. Roth also can give you the choice to pass on to your children without tax ( in case you decide to get marry and have kid(s) some day).

[Anonymous]

IRAs require that you have earned income. If you are in grad school check your eligibility. A traditional IRA will often help you save more, because it is pre-tax, but if you are in a very low tax bracket now and expect to be better off in retirement a Roth might make sense.

[Anonymous]

Hi,

OP here. Thanks for all of the helpful replies. I am in grad school but work full-time as a teacher so I assume I would qualify. I still pay tuition monthly, so will probably try to open this account in a year or so when my salary goes up and I am out of school. It sounds like Roth is best for me. Thank you