A question for a friend.
28 yr old single mother of 2 (9 & 2), she contributs to 403b $ 200 / pay period , which is below what she can contribute.No match from
employer. She wants to start a Roth IRA , should she fund her 403b to the max possible first ? or is it wise to start a Roth now?
Thanks in advance for your answers.

I think it would be a good idea to max out a Roth IRA first, as long as the company is not matching any money to the 403(b). After maxing out the Roth, she should then place any addition money in the 403(b).

403B plans are notorious for having investments with very high fees in them. Therefore, if there is no company match, it is usually better to fund a Roth IRA first, then go back to the 403B if you are able to contribute more than the maximum to your Roth.

However, one of the great benefits of 403B and other employer sponsored retirement plans is the automatic savings feature. If you're not a disciplined investor (and won't save the max in the Roth IRA), you should stick with the 403B for the forced savings.

nad, it really depends on what your friend wants to do. First of all, is she sure she can contribute the money and that she won't need it until she's 59 1/2? If so, it might be better to set up a Roth IRA and contribute to that. Is she worried about her investment options? The Roth IRA offers more investment options than the 403(b). The tax treatment on them is also different - the Roth IRA is funded with after-tax money, but the 403(b) is funded with pre-tax money.

The big thing is that she really needs to talk with a financial planner who can help her understand everything.