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Author: tlswms One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 741067  
Subject: Poll: Opting Out of 401k Date: 5/6/2005 9:16 AM
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no - I want max tax savings now.
yes - I'm only doing the 401k shuffle if my employer's matching.

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Author: alstroemeria Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 233271 of 741067
Subject: Re: Poll: Opting Out of 401k Date: 5/6/2005 9:49 AM
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I said No because we already have more loot in taxable than in 401k/403b/IRA accounts put together. But I still wonder if I'm doing the smart thing. I max out my 401k with no match and also my Roth. DH maxes out his 403b with no match as well as his state retirement fund, which is 100% matched--6% apiece--and Roth.

We really have little to deduct--no mortgage--so the tax savings is nontrivial, but not a big deal either.

Until recently my 401k, which is almost 50% FLPSX (Fidelity Low Priced Stock), beat my personal investments slightly. But this year I'm beating the 401k for obvious reasons: bad year so far for small caps and my personal accounts are more evenly allocated. We only have a few funds available in the 401k, and this year I've been putting every new dollar into Fidelity Diversified International (FIDVX), which is down less than any alternatives available to me except the govt income fund (which I already have 15% in) and the Fidelity MM fund (which I don't bother with).

Advice welcome.

=Alstro, my kingdom for a pension ;-)

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Author: sydsydsyd Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 233285 of 741067
Subject: Re: Poll: Opting Out of 401k Date: 5/6/2005 12:06 PM
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I've only worked at one company that offered any 401(k) matching, but I've always contributed the maximum. Living in California, I would have lost 40% straight to taxes if I had opted not to contribute. Even if tax rates do increase in the future, I would expect that any withdrawals will be in one of the lower brackets, and perhaps not in the state of California. (However: how are withdrawals taxed if I live in another country, say, Canada or Australia, at the time of withdrawal?)

Also, following the example of a friend of mine who was out of work for the second half of last year and missed contributing half of the allowed sum, I decided to front-load my 401(k) this year by setting my contribution level to 75%. As a result, even if I were to take the rest of the year off, my 401(k) is already fully funded. I think that if my employer offered matching funds, I would have had to contribute evenly throughout the year to get the full match, correct?

sydsydsyd

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