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I work over seas and claim the $70k foregin income exclusion. So in effect I pay no income tax and am in the lowest tax bracket. The question comes up how to handle my 401(k) contribution. All advise I have found and my thinking is that putting all you can into the 401 is a good bet. However, I don't need the tax break. I can do better annually in my stock portfolio than I can in the 401 which is limited to a few stock / bond mutual funds and an index fund. Not a bad plan but none of the funds can keep up with a simple Dow4 or whatever. Should I be fully into the 401k? Obviously the non tax issue of discipline is a consideration but for now I factor that out.

Please comment.

Bill in Bulgaria
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