403b, IRA, Roth IRA?! Help! I work for a non-profit and we currently don't have a retirement plan.?

Question

Ok so here are the details. I am 26. single and make $50K (before taxes) a year. The non-profit I work for wants me to stay long term and I brought up my concern of not having a retirement plan. So they came back to me and told me to come back with a recomendation and this is where I need your help I am going to end up with one of the three things IRA, Roth IRA, or 403b funded fully by work but it has to make business sense. I am the only employee so would it make 'business sense' to establish a 403b? If so where and how? Ok as a plan B I know I can set up an IRA (tradtional or roth) with nearly any brokerage or bank. Would they pay me directly or is possible to fund directly from my payroll? Also seeing I have 34 years until retirement would I be better with a Roth or Tradtional IRA?

I know this is a long question but I appreciate the help in advance.

Thank you.

Answer 1

If you choose a Roth, you will not be able to deduct the contributions.  If you have a home interest deduction you are probably in a pretty low tax bracket (25%?fed/state).  This might make the Roth the most beneficial.  You would pay $1250 in tax today, but if it were to quadruple in 30 years (make 7.2% yr over year) you'd pay no tax when you took it out.  And I'm betting tax rates will be higher in 30 years.

When looking at investment options, most people will direct you to look at mutual funds etc.  I want to also suggest you look into Annuities because they guarantee you won't lose your principal investment, may bonus you for depositing into the account, and some pay very high rates of return.

Answer 2

1. Sell drugs

2. Embezzel

3. Blackmail

4. Marry Rich

Answer 3

Some companies will set up payroll deduction IRA or Roth IRA plans (I use American Funds with many of my clients) , so you can contribute to the plan through payroll deduction.  This doesn't cost your employer anything, but they also don't have to match- it's all your own money going in.  Based on your age, the Roth seems like the best choice.

A 403b is probably not viable for just you.