As of June 30, 2002 I will be debt free! I can now start seriously to begin to save for my retirement and get the ball really rolling in my favor.I have some questions I'd like your input on regarding my retirement funding. I know that the combined knowlegde here will help me get to where I want to be. But first some background info:GeneralAge:35Marital Status: SingleHealth: Very goodHousing: RentDebt:$0 (as of June 31)SalaryGross Annual Salary: $36,509.Net Salary: $24,464. (Insurance, Gym, FICA, 401(k) etc. take a toll)Gross Monthly: $3,042.Monthly Take Home: $2,038.SavingsING Account: $175.Retirement AccountsMonthly 10% into 401(k): $304.Current Total in 401(k): $4,975.8.5% Employer Contribution:$258Current Employer Total: $4,321.(I'll be fully vested in this as of August 31st)Obviously, with my debt gone, I can either a) spend more or b) save more. I prefer the latter. First thing I obviously want to do is set up an emergency fund. Given my current situation, I will need about $2000. That covers my rent, etc., for about three months.I was thinking about upping my 401(k) contributions to 15%. However, I have heard that it might be a better deal to open up a Roth IRA, because even if though is taxed now, it will not be taxed later on when I need all the dough I can get my hands on. I am not the greatest mathematition, so here's what I have come up with:If I up my 401(k) to 15% that is a 5% increase over what I am doing now. Over one year, that will equal $1,825. over what I put in now. I can put $2,500 into a Roth per year.Then there is the taxes situation. Being a single male, I get popped by the Feds, Missouri & the city of Saint Louis. Obviously I am at a pretty high bracket. Every month they take out $438.00 for a total of $5,256 per year. It equals 14% of my gross and is 22% of my take home pay.So what in the world is a better deal, a Roth or my 401(k)? Is it wiser for me, givem my current life status to take the tax relief now, or later? That's the part I am having difficulty figuring. Thanks way ahead of time!milleniumfalcon
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