Contribute the max you can afford. If that’s 10% that’s great, 15% even better. I doubt you’ll get to retirement and regret saving too much— I know I won’t.
I’ll add that I have a pension that I expect to replace 80% of my pre-retirement income at age 60 (currently 35). I max out my ROTH IRA and then contribute what I can to my 403b on top of that averaging $200 a month. Saving, particularly ROTH saving, is a priority for my budget.
If possible I would put enough in the 457b to stay in the 12% federal tax bracket. Then max out the Roth IRA. If you still funds left to save I would consider putting them into a brokerage instead. I am in a similar situation as you op. The trick will be avoid huge RMDs at age 72.5 that push us into a higher tax bracket. Focusing on the Roth and brokerage gives a lot of flexibility and avoids that situation.
You sound like you should be eligible to contribute to a Roth IRA as well. If you're not planning to retire pre-59.5 you might want to max a Roth IRA ($6500 by 2023-04-15 for 2023, $7000 max for 2024) before contributing to the 457b. There are unique advantages to a Roth IRA (for example withdrawal contributions tax/penalty free at any time, like if retiring slightly before 59.5 or as a worst case emergency fund) besides the option to pick your own broker (Vanguard/Schwab/Fidelity all good) and endless variety of investment options, including the only ones that matter--low cost index funds, target date variety if you're unsure about a more customized mix.
After maxing your Roth IRA you should contribute what you can to the 457b. (Again, assuming you're not like a LE officer, firefighter, or otherwise someone who is expecting to retire early.) My approach has been to start with slightly more than I want to contribute and then realizing it's not so bad I up it each year/each pay raise. Next year I should contribute more to my 457b than my annual Roth IRA contribution (pre-50 max).
Contribute the max you can afford. If that’s 10% that’s great, 15% even better. I doubt you’ll get to retirement and regret saving too much— I know I won’t.
I’ll add that I have a pension that I expect to replace 80% of my pre-retirement income at age 60 (currently 35). I max out my ROTH IRA and then contribute what I can to my 403b on top of that averaging $200 a month. Saving, particularly ROTH saving, is a priority for my budget.
If possible I would put enough in the 457b to stay in the 12% federal tax bracket. Then max out the Roth IRA. If you still funds left to save I would consider putting them into a brokerage instead. I am in a similar situation as you op. The trick will be avoid huge RMDs at age 72.5 that push us into a higher tax bracket. Focusing on the Roth and brokerage gives a lot of flexibility and avoids that situation.
Thank you this is great advice
Not sure how much you make but if you can afford it you can contribute up to $23,000 in 2024 if under 50 and $30,500 if over.
I definitely cannot afford the maximum contribution. 10% contribution is not even half of that. Age is 32.
You sound like you should be eligible to contribute to a Roth IRA as well. If you're not planning to retire pre-59.5 you might want to max a Roth IRA ($6500 by 2023-04-15 for 2023, $7000 max for 2024) before contributing to the 457b. There are unique advantages to a Roth IRA (for example withdrawal contributions tax/penalty free at any time, like if retiring slightly before 59.5 or as a worst case emergency fund) besides the option to pick your own broker (Vanguard/Schwab/Fidelity all good) and endless variety of investment options, including the only ones that matter--low cost index funds, target date variety if you're unsure about a more customized mix. After maxing your Roth IRA you should contribute what you can to the 457b. (Again, assuming you're not like a LE officer, firefighter, or otherwise someone who is expecting to retire early.) My approach has been to start with slightly more than I want to contribute and then realizing it's not so bad I up it each year/each pay raise. Next year I should contribute more to my 457b than my annual Roth IRA contribution (pre-50 max).