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Subject:  Re: 401K or do-it-myself? Date:  9/26/1998  11:04 AM
Author:  TMFPixy Number:  5656 of 88826

AliFool, eager to be Foolish, asks again:

Currently, I contribute 10% of my pre-tax salary to my 401K. I only get 2.5% match for my first 4%.

How can I tell whether it is potentially worth it for me to put more than that matched 4% in?

I originally decided on 10% because it was easy, automatic savings specifically for retirement. But... if I can get by with 4% there, and make more on the other 6% somewhere else (as long as I earmark it for retirement), please enlighten me.

I am pretty sure there are lots of tax issues here that are lost on me (being such a new Fool). In case it matters, I believe that I am in the 28% federal bracket.

Well, to repeat myself because it bears repeating, here's one Fool's opinion.

Yes, it's certainly Foolish to contribute at least enough to receive all the Free Money your employer will provide through a company match. Beyond that, you must compare the after-tax returns in the 401k to that of any other alternative you may wish to consider. Additionally, you must maintain the same discipline in the alternative as you do in the 401k (i.e., automatic contributions that increase as your pay does). See Step 4 of my 13 Steps to Foolish Retirement Planning available at: .


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