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URL:  http://boards.fool.com/dude-just-save-money-for-retirement-a-tax-free-25970144.aspx

Subject:  Re: New law needed for 401k Date:  10/6/2007  2:06 PM
Author:  Hohum77 Number:  59451 of 75340

Dude, Just SAVE money for retirement!

A tax-free environment would be great, but if that is not available, one moves along to the next option ... a tax sheltered account (401k, 403b, etc.)

Okay, so you are not allowed to contribute the first year ... bummer.

Next alternative ... taxable accounts. Buy-and-hold good dividend paying stocks , then all you pay is the 15% tax on dividends. DRIP (reinvest those dividends in the same investments), and the Capital keeps compounding. An apples-to-apples comparison i.e factoring the taxes at 401k withdrawal time, you may end up with better returns than a 401k plan.



Hohum
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