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Subject:  Re: IRA vs. HSA? Date:  12/7/2004  8:59 PM
Author:  ziggy29 Number:  43451 of 88830

>> This is dangerous misconception I see over and over. Yes, it's nice if an employer matches some of your 401k, but you should contribute the maximum per year regardless of the employer match! Forget the match, the tax free contribution and tax deferred growth are the real benefits of the 'k. <<

Not necessarily. Preferred treatment of long-term capital gains makes taxable accounts more attractive for buy-and-hold (for at least a year) investments than it used to be. And if your 401K plan has a lot of crappy, low-performance and high-expense mutual funds, as is often the case, the case for taxable accounts strengthens. And if you're a young person planning to invest heavily and aggressively in order to retire at a young age, taxable accounts don't incur penalties for withdrawal at ANY time.

I think most folks would be wise to put some eggs into the 401K, Roth AND taxable basket. When they get older, their ability to manage their taxable income to reduce retirement tax burdens will be much improved for it.

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