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>> Thanks for the advice. What I am really wondering is... is it foolish ("small 'f' foolish") to NOT put 18% (instead of 10%) in -- when I could avoid paying taxes on 8% more of my income? <<

Not necessarily.

You do have other needs than your retirement.

While it's certainly small-f foolish to save less than you're capable of saving, that doesn't mean that every last dime of what you save should go into tax-deferred accounts with long time horizons.

You're likely to have other needs in your life before retirement, for which you'll need to save: an emergency reserve (i.e. a few months' after-tax salary in a liquid and safe account), saving for down payments on a home, a car, potentially a college fund for little ones someday, perhaps for early retirement (before you can get to the retirement savings penalty- ad annuity-free), tha kind of thing...

Analyze your retirement situation. Invest that portion aggressively, especially if you're decades from retirement. If you'll have a really nice amount in there, assuming 10% (conservatively), I'd personally start looking to save elsewhere, perhaps "tax-efficient" portfolios in taxable accounts.

I was in the same position as you. I now put 8% in salary into my 401K, and since I started with 12% when I was 22 and have put in 8-10% in the entire decade since, I don't think my retirement accounts need fattening. I decided instead to start building a taxable account which I could use between the ages of 50 and 55 to allow me to retire at 50.

Your own needs and goals have to answer the question. But remember that retirement funds essentially "lock up" the money for a long time, so be sure you've saved enough in accessible accounts as well.

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