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Subject:  Re: Contributng Too Much towards Retirement??? Date:  1/28/2004  3:08 PM
Author:  FuskieFool Number:  38793 of 88816

In summary, order of importance:
#1--emergency fund/credit card debt
#2--401k to company match maxiumum
#3--Roth IRAs
#4--taxable accounts

I would revise this as follows:

1) eFund (build up 3-6 months expenses in case of sudden loss of income). This neccessitates your creating a budget to see on what you are actually spending money. I recommend an ING Direct Orange Savings (2%) for risk-free access.

2) 401k up to company match (10% at $115/wk for you). If there is a company match for DWWT (Dear Wife who Teaches), then factor that in. If not, DWWT may want to put in a minimum amount just to say she is participating.

3) Fund Roth IRA $3000 ($57.69/week each). If your Roth account has transaction fees, put it into an ING Direct Orange Savings account (2%) until you accumulate sufficient funds to invest.

4) I am guessing your kids are young. That won't last long, so consider opening 529 for each of them to prepare for their college education.

5) Do you rent? See a new car or home in your future? Consider an Freedom Fund (fFund), which like an eFund, is money sest aside for a future major purchase. If the purchase is a few years away, consider a high yield bond fund or other low-risk investment.

6) Now we go back to your 401k. Fill'er'up! If you don't need it to save or spend, put it into your future.

In general, I would steer clear of taxable accounts unless you have this uncontrollable need to pay taxes. Hope this helps.

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