403(b) with low fees vs opening Roth IRA

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#1

Hi everyone! I’ve completed the course (awesome by the way!) and I’m unsure if I should open a Roth IRA or continue adding money into my 403(b) Target Date Fund. I work for the University of California, and am already automatically enrolled in their retirement plan (UCRP). They don’t match, but after 5 years you become vested.

The expense ratio on the 403(b) is 0.03% (although at one point it was 0.07% so I’m not sure if this changed permanently or fluctuates) and there’s a quarterly administration charge of $8.25.

So my questions are:
Are those considered high fees for the 403(b) vs a Roth IRA?
Should I open a Roth IRA and invest in there before putting more money in my 403(b)?

I’m just trying to retire eaaarly :slight_smile: Thanks!

#2

Hi @JenniferA!

I’ll cover this in tonight’s office hours (7/14/2021) with the recording available afterwards on the course site!

If you’re not signed up for office hours, you can sign up here.

#3

Hi Jennifer! Those fees sound low which is good. My 403b has a $5 monthly fee through Vanguard. I like to prioritize my Roth IRA so the money grows tax free but some people prioritize the 403b assuming their tax bracket will be lower upon retirement. You mentioned target date fund. Do you know if that’s a target date index fund? With the low expense ratio it sounds like it. Happy investing!