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Author: 1Vagabond One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79721  
Subject: Re: Max 401k or IRA Date: 12/29/1999 3:53 PM
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1triger1 says...
After 20 years I would net $672,000. However, if I took $7,500 ($15,000 after 50% tax) and invested it every year for 20 years into a Roth IRA with Foolish Four returns of 24%, I would net $2,830,690.

Which would you rather have $672000 or $2830690??? Granted You could only contribute $2k to a Roth and it you be tax-free. The other $5.5k could be invested in long term stocks (1yr+1 day) with long term capital gains (20%). Remember, you could pay tax of 28% or more on you 401k on withdrawal depending on tax bracket.

Ringfinger says...
You are also missing that a 24% return yearly would be nice, but improbable.

I do believe that this 24% return is the 30-40 year average of the Foolish Four. I sure wouldn't expect an average return of any less for 1trigger1. I've not been investing Foolishly for 30-40 years but only the last year. My 150% return on my portfolio this year has made me very happy. Do I expect the same return next year? NO, but I know that possibility exists and I do expect a better then 24% return next year.


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