Taking a new job with a 403(b)


I am about to start a career at our county after being in the private sector for 5 years. I believe Clark has talked about this in the past but the priority for investments is different for a 403(b) compared to a 401k and I was thinking of investing to the match for the 403(b), then putting into a traditional IRA (my wife and I make to much for the Roth and the back door makes me nervous) then I was thinking of investing the rest in a traditional rather than the 403(b). Do my fellow Clarkies have any thoughts?

the back door makes me nervous

It shouldn’t. The technique has been blessed by the IRS, and the paperwork is minimal.

I’m not sure why you would invest in a traditional IRA if you don’t qualify to deduct the contributions. If it were me, I’d do the following, in this order of dollars (not in order of time–you have to do 1 and 3 at the same time):

  1. contribute to the 403(b) enough to get the entire employer match.
  2. backdoor Roth IRA if you don’t have any pre-tax money in your Traditional IRA.
  3. contribute to the 403(b) to the max as long as the fees and investment options are reasonable.
  4. invest in a taxable account (do this instead of #3 if the 403(b) fees or options are poor).