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4/22/2019 5:32:20 PM
Posted: 11/21/2008 6:38:37 AM EDT
Should I bother participating or should I just roll my own retirement account in this climate?

It was a no brainer at my previous companies where they matched a certain percentage. But my new company does not match.

Unfortunately, due to my income, 401K is the only way I can play with pre-tax money (no IRA).

Since the 401K monies come off the top line, I guess that I'm making 28% on every dollar I contribute to the plan (even without the match). Am I looking at that the right way?
Link Posted: 11/21/2008 6:40:15 AM EDT
I would say yes, but I am far from a finance guy. I am tagging this for the finance guys views though
Link Posted: 11/21/2008 6:40:15 AM EDT
Definitely participate in your 401k. Pre-tax breaks are few and far between these days.
Link Posted: 11/21/2008 6:40:17 AM EDT
Consider Roth if you qualify.
Link Posted: 11/21/2008 6:41:18 AM EDT
Compare it with Roth and "traditional" IRAs. You may end up doing two of the above or all three.
Link Posted: 11/21/2008 6:42:05 AM EDT
I've considered going the other way - after tax to my 401K - so they can't tax it later. I think taxes will always go up. Is my rational wrong in this?
Link Posted: 11/21/2008 6:44:14 AM EDT
Originally Posted By machaira:
I've considered going the other way - after tax to my 401K - so they can't tax it later. I think taxes will always go up. Is my rational wrong in this?


They may find a way to tax it later anyway.

You may be right. Nobody can predict the future. Please consider that the rate at which you eventually withdraw funds will probably put you in a lower tax bracket than you are in now as a wage earner. That should mitigate the risk of higher taxes overall.
Link Posted: 11/21/2008 6:45:40 AM EDT
Originally Posted By machaira:
I've considered going the other way - after tax to my 401K - so they can't tax it later. I think taxes will always go up. Is my rational wrong in this?


Usually when you retire, you are in a lower tax bracket (low to no income), so I'm not sure that I get the post-tax plans.
Link Posted: 11/21/2008 6:48:33 AM EDT
Originally Posted By machaira:
I've considered going the other way - after tax to my 401K - so they can't tax it later. I think taxes will always go up. Is my rational wrong in this?


I would assume that they will tax it later anyway. Seriously.

In the current political climate I would take any tax breaks right away.
Link Posted: 11/21/2008 7:00:09 AM EDT
I guess my problem is this:

Do I take 72 cents on the dollar today or do I "save" 28 cents but not be able to touch that dollar for 30 years (in my case).

With a company match, it is a harder equation since you are leaving free money on the table. In my case, however, I need to determine if liquidity now (for investments or real estate) is worth more than a 28% savings in 30 years.

Thanks for all the advice.
Link Posted: 11/21/2008 7:06:28 AM EDT
Well, I have faith in the market, and I have a long way to go until retirement.

In any event, the municipality that I work for does not offer match, so I am not enrolled their 401K. I am enrolled in a traditional IRA through Merrill Lynch, and they take X dollars on the first of the month after taxes. I haven't opened my statements in months, as I really don't want to know. With that said, I have a tremendous amount of faith in my financial consultant.
Link Posted: 11/21/2008 7:07:41 AM EDT
The only problem is if the communist fuckers in the democratic party steal everyone's 401k.
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