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Author: TchrP Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Re: To 401(k) or not to 401(k)??? Date: 4/17/1998 5:58 PM
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>> In the past I have always contributed to my 401(k) for the tax savings and for the "free" money when I had a plan that matched. Now that I'm learning the ways of the Fool I'm not sure if I should still contribute to a 401(k) or put the money into stocks.
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In general, if you can get any significant amount of matching from your employer, you should contribute up to the amount that will be matched. Where else can you get the effect of an immediate 50 percent return?

But you should also consider what investment options are available in the 401(k), and how long you might stay with the company. It is more attractive to contribute the maximum that can be matched if there is an acceptable investment option (in the Foolish way of thinking, an index fund would qualify; most other mutual funds wouldn't).

How long you might stay matters because your money has to stay in the plan as long as you stay with the company. After that you can elect to roll it over into a self-directed IRA. If none of the investment choices is very attractive, you have to weigh the partial matching against the return you would hope to get with an investment outside the plan.

Keep in mind, in any case, that you can invest in a Dow Dividend portfolio somewhere else if you still have funds available.
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