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[rafrafraf]

Hello wise forumites,

I searched the forum for information, but found only a handful of topics. This is my situation.
I started my job last fall and contribute to 403(b) plan and also contribute to  another optional retirement plan for CC employees. I'd like to have an IRA as well. I am still learning about investing. According to what I heard/read,  Suze Orman recommends Roth IRA while David Bach prefers traditional. I haven't decided yet which one I'll choose, but leaning toward Roth.

 I don't have any debts, have an emergency fund and saving a down payment for a house. My goal is to buy a house within 2 years. (sooner the better).  I recently increased my 403(b) contribution to 12% of gross salary and 3% goes to the optional plan.

Is it better to have an IRA while contributing to 403(b)?

At this point, should I focus on saving for a down payment without opening an IRA?  What other factors should I consider before opening an IRA?

Thank you very much in advance.

[_touchedbyanoodle_]

IIRC, you can use up to $10,000 in IRA funds for a down payment on your first home, so you can contribute to an IRA and save for a house at the same time.

But, wiser forumites than I will have more confidence in answering your question, I think.

[cgfunmathguy]

Hello, Raf.

The other financial guru that people list here (Dave Ramsey) also prefers the Roth IRA to the traditional one. Whether you should have an IRA while also participating in two other retirement plans is something you should ask a qualified financial advisor. Also, s/he should be able to the question about which type of IRA have, assuming the answer to the first question is "Yes." Finally, s/he should be able to help you figure out how to buy a home while still doing the rest of what you're doing (contributing to retirement, etc.) in the next two years.

While it sounds like a cop-out to say "go see a financial advisor," that's exactly what I'll be doing later this year when I become debt-free.

[pedanterast]

Nothing in either Ramsey's or Orman's backgrounds even remotely qualifies them to opine on whether a Roth or a traditional IRA is better, and anyone who makes a blanket statement that one kind is better than the other has zero credibility.  I have written a lot about the two types of IRAs and which might be better under which particular circumstances, if you care to do a search.

[cgfunmathguy]

Nothing in either Ramsey's or Orman's backgrounds even remotely qualifies them to opine on whether a Roth or a traditional IRA is better, and anyone who makes a blanket statement that one kind is better than the other has zero credibility.  I have written a lot about the two types of IRAs and which might be better under which particular circumstances, if you care to do a search.

Allow me to be somewhat pedantic for a moment, please. If you actual read my entire post, you will notice that I recommended seeing a financial advisor for several questions, including the one about which IRA would be a better option in that person's circumstances.

[oldadjunct]

Nothing in either Ramsey's or Orman's backgrounds even remotely qualifies them to opine on whether a Roth or a traditional IRA is better, and anyone who makes a blanket statement that one kind is better than the other has zero credibility.  I have written a lot about the two types of IRAs and which might be better under which particular circumstances, if you care to do a search.

Allow me to be somewhat pedantic for a moment, please. If you actual read my entire post, you will notice that I recommended seeing a financial advisor for several questions, including the one about which IRA would be a better option in that person's circumstances.

OP, whatever you do don't get distracted by this silly tit-for-tat.  Reading between the lines of your post you are in your late 20's to mid 30's.  Financially you are dong fine.  Continue to max out your employee retirement program. Sock the rest of your disposable income, dollar cost averaging, into a solid mutual fund. If a near term goal of a down payment, then forego any investment vehicle and just pump that money into a savings account.

Unless I misread your post, you are newish at a CC job.  We are not talking big bucks here.  Go slow and steady, stay low risk and liquid.  Your tax liabilities are inconsequential.  It would be ease to over think your situation.

[rafrafraf]

Thank you everyone. I'll take my time and research before choosing an IRA. My first priority is to buy a house, so I'm going to focus on that while continuing contributions to 403(b). I do feel that I have lot of catching up to do as I started my retirement accounts very recently.

[clean]

A bunch of questions...

Are you married?
how old are you?
approx. salary?
how big is your emergency fund?
Does your employer offer a Roth 403?
children?
how old is your car (will you need one soon)?


On other issues, can you live on your 9 month salary?  Remember, at most places, summer is a separate deal and you dont want to depend on it for bills.  So you may want to live on the 9 month and save the summer money for the down payment. 

[allhailtheramen]

The option to make a down payment will be there no matter what (barring a zombie apocalypse), but you can't contribute 5k to last year's IRA if you don't do it by April.

If you can drop down a tax bracket by shoveling in 5 grand, there isn't really a question...