I've been with my employer for a little over 13 years now and have a 457(b) plan that I have been putting money into, gradually increasing my contribution every year  We have only ever been eligible for salary reductions as standard deferral.  They just started offering ROTH Contributions.

My question is should I just keep doing the salary reduction contribution as the account already has a chunk of money in it (not huge, but a decent amount), or pause that and start just putting money into the ROTH side.  

The other option I was thinking would be to try to max out the ROTH and put what is leftover into the other account?  I do $300/bi-weekly into the 457(b).  So that would max out the ROTH every year, and I could probably sacrifice another $100/bi-weekly to keep the other account growing.

I'm not a financial expert and I don't play one on TV or the internet.  But!!!!!!!!!!!

My understanding of the 457b is that you cannot do anything with the money until you sever ties with the company.  With the Roth, at least you could have access to it at any time.  Maybe someone will chime in who actually knows.  FWIW, I'm in this exact same boat with my employer beginning 2024.

It is essentially a 401k for public safety/municipal employees with a few penalty free withdrawl stipulations while still employed for emergency situations.  It also allows you to withdraw prior to 59 1/2 without penalty when you are no longer with your employer.

ETA, the ROTH contribution would still be considered a 457(b) contribution. So same idea, can't withdraw anything until I retire.  Which I wouldn't consider withdrawing early anyways.

Pay taxes now or pay taxes later.

I had a regular IRA I converted to Roth. I don't see taxes ever going down.

People are mixing things up

There are employee related retirement accounts 401/457 in both traditional pre tax and post tax ‘ROTH’

There are also IRA, Individual Retirement Account traditional pretax (and post tax) and ROTH

The question is about the first group.

Some things to consider
- what is your marginal tax rate (tax on the next $ you earn)
- do you have children and are near the child tax credit limits?
- are there other reasons you want to reduce your current taxable income now, not the future?

You can always max out your 457 (in whatever type you choose)and invest even more savings into a ROTH IRA.

Also, for a 401 ROTH the employer ‘match’ does not go into the ROTH account. It goes into the traditional account so it can be taxed when withdrawing. Only your post tax contributions can go into the ROTH

I guess my main question is, with the current account that has money in it, would I be missing out on the further compounded interest or gains if I paused contributions to that or lowered them and started an entirely new ROTH account essentially.  Would the extra money earned on that account balance out the taxes I would save on a ROTH when I am ready to withdraw.

I know, probably a question better suited for a FA that could look over the numbers, but there seems to be some smart people on this site when it comes to investing.  So more so just a general opinion.

If your tax rate is the same when the money is invested and withdrawn the net amounts will be the same.

The ROTH is the better financial investment if you believe your taxes in retirement will be higher.

Many people will invest money in a specific order (1) 401k to receive all of the employer match, (2) HSA if eligible, (3) ROTH 401k and ROTH IRA’s

It sounds like you might be confused and have some very fundamental misunderstandings that are making it hard to answer your questions.

When an employer plan like a 457b allows for Roth contributions, they are not held in a different "account" or "side".  You simply may elect to have your payroll contributions directed to pretax or Roth, or a mix of both.  Inside the 457b, the money is held in separate "sub-accounts" but this is largely transparent to the end consumer and it used for maintaining separation for taxable/tax free earnings growth, future rollovers, etc.

To answer specifically what I *think* your current question is.... if you stop contributing pre-tax payroll contributions, and switch to Roth payroll contributions, this will not impact your existing money.  It is held inside the 457b and will continue to be invested and potentially grow.

Nothing will "balance out" when it is time to withdraw.  You will simply choose how much to withdraw from taxable, and how much to withdraw from tax-free based on your needs and requirements at the time.  These might be from the existing 457b account at that time, or you might roll these over into personal self-directed IRA's (one for traditional IRA and one for Roth IRA).   It is good to have multiple sources of potential income during retirement:  taxable long term capital gains, cash, taxable retirement accounts, and tax-free retirement accounts.  This allows you to control your taxable income and optimize it to be the lowest it can be.

I participated in a Roth 401k when I was working.  Wish I had sucked it up and contributed even more.
Having a nice stash of tax free money available as you unwind your retirement savings helps mitigate taxes in retirement.

I've been a fan of putting money in traditional, maxxing it out. Then rotating a managed portion out into Roth so you can have pre tax and post tax funds for the most versatility.

Having some contributions in each type of account is (i think) a good way to go.  that gives you some options (tax diversification) when it comes time to withdraw.  I think another thing to consider when you have an employer based Roth is to go ahead and open an outside Roth at a brokerage like Fidelity, Schwab, etc and fund it to some amount just to get it open.  It is considered "open" for the whole year you open it no matter which month  it is opened.  That way it starts the 5 year clock that you have to consider when you're under 59.  Then, when you're ready to leave the employer plan and roll the Roth 457 into it, all of it will be considered as "aged" which can let you pull out the gains tax free (as well as the contributions".

Are you saying that if I rollover a roth 401k into my Roth IRA the entire rollover magically turns into contributions to my Roth IRA?  
Ie. If my roth 401k was 50% contributions and 50% earnings it becomes 100% contributions into my Roth IRA?  

That makes sense but I never considered it…. I’m tempted to start putting some money into my roth 401k at work now!

No. Earnings do not become contributions due to a rollover from one Roth account to another.

Accountant