No. of Recommendations: 0
Kecpa wrote:
>> I start a new job tomorrow morning. My new employer
>> offers a 401K but no matching. All of the funds
>> available have a *minimum* 3.5% front end load.

TMFPixy wrote:
> You have to run the numbers to be sure, but on the
> surface and in the absence of any employer
> match, it seems you can do better for yourself
> elsewhere.

Tiddman wrote:
>>Actually I strongly disagree with TMFPixy. The 401(k) program is a great way to set aside money
without taxes. The max 401(k) contribution this year is $10,000 whereas the max IRA contribution
is $2,000. Deducting it right from your paycheck before you even see the money is a great way to
save.<<

Kecpa, I would have to weigh in on the side of TMFPixy on this one. You really have to run the numbers. Again, I would refer you to Robert Sheard's points on poor performing 401(k) options. As he notes, "...it may not be in your best interest to continue contributing to the plan." Or, in your case...begin contributing to the plan.

His article is at --

http://www.fool.com/DDow/1998/DDow980819.htm

At my employer, our mutual funds trail S&P Index Funds by 42% over the past 4 years. Clearly it is in my interest to get out of our 401(k) unless an index fund is made an option to us.

mcadoo11
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