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Subject:  Re: 401k Contribution Date:  8/9/1999  9:15 AM
Author:  TMFPixy Number:  12991 of 88810

Greetings, Jim, and welcome. You asked:

<<I'm in the process of trying to decide how much to contribute each month to my 401k plan. My company allows up to 15% Pre-tax and they match up to 6%. What are the benefits of contributing more than what my company will match? I also have several DRiPs which I would still like contribute to on a monthly basis. Is there a limit to how much of a tax benefit it is to contribute Pre-Tax?>>

Around Fooldom we believe you should participate in your 401k plan until you receive all the free money your employer will give you in the way of a matching contribution. Beyond that point, we suggest you step back and evaluate your options on a tax-equivalent basis. Compare your investment options to those available in any alternative you are considering. I suggest one way to that analysis in Step 4 of my 13 Steps to Foolish Retirement Planning available at Go through that type of analysis, and you may very well discover that a pre-tax investment isn't always the best route to go.

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