I am 28 years old and fortunately in a position where I am able to max out my Roth IRA contributions each year. I am also now contributing a similar amount (~$6,000/year) to my employer-sponsored 457(b) plan. I currently have approximately $44,000 in my Roth IRA, $20,000 in my 457(b), and $8,500 in an inactive (no new contributions being made) traditional IRA that was a rollover from a previous job.

I am anticipating a raise in the near future. My employer also offers a Roth 457(b) option. Should I:

a. Continue to increase my regular 457(b) contributions as I have been doing (I'm a long way from ever hitting the yearly cap)?

b. Start contributing to a Roth 457(b) while maintaining my existing regular 457(b) contributions?

c. Do something else?

1 Answer 1


In general getting a raise means you need to make sure that contributions to your retirement funds are keeping pace.

In addition each year you should determine if you are happy with the Roth/Traditional split. The decision regarding the split is a function of your marginal tax bracket. Lower brackets make the Roth the obvious choice, higher brackets make traditional the obvious choice. Someplace in the middle there is a shift.

If you want more Roth then you can contribute to the Roth IRA, then your only choice (assuming your aren't married) is to put money into the Roth 457(b).

Something to keep in mind, the employer portion of the contributions to the 457(b) is always traditional. So their portion will never be Roth.

In a separate calculation you should determine if the rollover IRA should be converted to a Roth IRA. This will require you to pay the taxes to do the conversion. The money being converted doesn't count towards any annual contribution limit.

  • There are no employer matching contributions to consider in this case. Theoretically there will be a pension, but I'm not holding my breath.....
    – Jack
    Commented Jan 1, 2022 at 20:13

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