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Author: Hauptstrasse94 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Is a 401k a bad choice for us? Date: 2/3/2004 9:57 AM
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I don't think a 401k is the best choice for us in this situation. Does anyone have experience/advice related to this?

I have always followed the advice repeated unfailingly to the newly employed. I started investing in my 401k right out of college without really knowing why, but now that I'm 32 I am quite glad I did. I opened a Roth IRA which I keep fully funded, and my husband does the same.

My husband just got a job that will require him to basically live in Kuwait for the next 12 months or so. This means he will be earning his first $80K free from federal taxes (with no local/foreign tax implications). We have discussed the idea of participating in his company's 401k but came to the conclusion that it makes no sense. Would that not just be saving money tax-free so we could pay taxes on it later? Since the money is already tax-free, why not invest it in something that does not require paying taxes on the principal upon withdrawal?

That also leads me to my next question- what types of investments are good to consider when we're not looking for a tax-advantaged savings account?

-Kristin
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