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Subject:  Re: Too much in a 401K Date:  1/3/2005  12:49 AM
Author:  FoolishYvonne Number:  43834 of 88786

You ask an interesting question and one that has crossed our minds, as well. My husband is also 43, has about 2x annual income in his 401K, and contributes the max that the company will match but not the max that he could. I also have an IRA worth about 1x my annual income.

We wondered if we should increase his contributions to the max allowed (as it sounds like you have done), but decided to stick with only the max the company would match instead. We did it for three reasons:

1) We feel our retirement funds are already quite healthy and don't foresee any reason that we won't be able to continue to contribute for the next 12+ years.

2) My husband really wants to retire at 55, which means he couldn't access the 401K for almost 5 years anyway and we'll need something more than a pension in the meantime. That brings us to #3...

3) When we retire, we don't want a lump sum that we have to divvy up based on how many years we think we will live. We want a monthly cash flow - income properties, dividends, holding the mortgages on our nieces and nephew's homes, whatever.

After watching my mom successfully support both herself and my father's expensive medical care from the three apartment buildings they purchased and tended during their working years, I believe a financially secure retirement is more about a healthy cash flow then a large lump sum. My dad's pension, their IRAs and their social security would never have come close to covering both his medical care and her living expenses.

Just my humble opinion, thrown in as food for thought.

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