I work for the government, and I will be able to retire at 50 with 3% per year worked (max 90%). I will probably work until 53, which will give me 27 years at 3% (81%). At 27 years you make about the same thing you do working as you would collecting retirement, since you do not have the added deductions. Using the current top out salary, that would be around around $60,000 per year in pension. I'm 32 and have another 21 years until my retirement (18 years minimum, 78%, $54,000).
I also have a 457 retirement that I'm funding, that I can start withdrawing from at 50. I know a Roth can only be accessed at 59 1/2, unless you meet certain requirements. The age in which you can withdrawal is why I'm apprehensive about opening a Roth IRA. I'm looking at contributing $10,000 - $15,000 per year towards retirement starting next year, and $5-8,000 this year.
My questions are,
- Should I increase my contribution to my 457 or open a Roth IRA?
- If I open a Roth. Max out Roth, and then contribute to 457?
- Keep money in a savings account?
- When I retire, what would be the best retirement option for avoiding paying massive taxes?
Other info, I have 0 credit card debt, and my vehicle will be made off by the end of this year (Owe $8,000). I also plan to have my mortgage paid off within 7-8 years vs 25 years (Owe $117,000).
Considering the issues with government retirements and the possibility of losing my retirement or changes in the retirement percentage, I want to have a backup plan in case something happens to mine.
Thanks for your help.
Read more: Contribute to Roth or 457, on top of pension?
