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teacher - 403b - just for last couple years

We were at a dinner tonight with some teacher friends and the subject of retiring came up - along with the 403b topic.
If someone never took advantage of the 403b program, but would like to make use of it in their last couple of years does it make any sense...... $16k + $5k catchup = $21k
A - it reduces current taxable income B - it adds a little ($80k) to a "new" deferred account
Thoughts ??
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Reply to
ps56k
$17K+$5,500 = $22,500 Do they have other savings? What tax bracket are they in?
In all but the rarest of situations, this is a great idea. The money would get saved pretax, at 15 or maybe 25%, and withdrawn likely at 10%, as it sounds like they have little saved.
Reply to
JoeTaxpayer

they have tons of other investments - just not in an IRA or 403b - I believe the IRAs were maxed at the $2k limit - and the rest of their portfolio is in taxable accounts.
Reply to
ps56k

they have tons of other investments - just not in an IRA or 403b - I believe the IRAs were maxed at the $2k limit - and the rest of their portfolio is in taxable accounts.
Reply to
ps56k
So close to retirement, the question is, will their bracket be lower than it is now? For most non-1%ers, The answer is yes. Ideally, it goes in at 25%, and out at 15% or even 10% at withdrawal.
Reply to
JoeTaxpayer
A qualified retirement plan is protected against most types of civil judgements like bankruptcy.
Reply to
rick++

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