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Author: Beans1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: To 401k or not to 401k, that is the que Date: 5/23/1999 10:05 PM
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I've always been told, like a mantra (as well as reading this in several how to books on investing) to 'max our your 401k'...its basically free $ etc etc.

Yet several Fools on the boards have been saying 401ks are too limiting, and you're better off contributing to a traditional tax deductible IRA.

I agree many 401ks suck, while all have their limits, vs the limitless possibilities of your own IRA. However, its my understandign you can only put 2000/year in a traditional IRA. Theoretically you can put a lot more into a company's 401k plan. PLus if you already have a roth, your yearly max for both combined is still only 2,000 total..whereas a roth w. a 401k allows for more savings..or am i totally incorrect?

Thoughts?

--the beanster
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Author: Canth Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10714 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/23/1999 10:52 PM
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<<<I've always been told, like a mantra (as well as reading this in several how to books on investing) to 'max our your 401k'...its basically free $ etc etc.

Yet several Fools on the boards have been saying 401ks are too limiting, and you're better off contributing to a traditional tax deductible IRA.

I agree many 401ks suck, while all have their limits, vs the limitless possibilities of your own IRA. However, its my understandign you can only put 2000/year in a traditional IRA. Theoretically you can put a lot more into a company's 401k plan. PLus if you already have a roth, your yearly max for both combined is still only 2,000 total..whereas a roth w. a 401k allows for more savings..or am i totally incorrect?

Thoughts?>>>

My current take is
401K for all of company match.
IRA (Roth or Trad depending on circumstances.)
401K to Max or Taxable accounts depending on Quality of 401K investments.
Canth


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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10716 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/23/1999 11:03 PM
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If your 401k has a company match, you're probably O.K.

If there's no company match, it's very important to watch the fees and commissions charged in the plan. Anything over 1.50% in annual expenses would probably make the 401k uncompetitive with a taxable account invested in the Vanguard Tax-Managed Index Fund.

intercst

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Author: bhmirage Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10717 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/24/1999 3:29 AM
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First off does anyone know why my "cut and paste" function does not work on this board? I'm using AOL.

and regarding 401K with higher fees vs. taxable accounts. What about the fact that your investment in a 401K is already 28 percent more because of the intial investment not being taxed?..Dosen't this make even higher fees more beareable? Or not? or only up to a certain point? .(if you're in the 28 percent tax bracket). I'm in this situation myself about to maybe start a 401k in a program that seem to have high fees, and not so great investment choices.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10725 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/24/1999 9:17 AM
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Greetings, Beanster, and welcome. You wrote:

<<I've always been told, like a mantra (as well as reading this in several how to books on investing) to 'max our your 401k'...its basically free $ etc etc.

Yet several Fools on the boards have been saying 401ks are too limiting, and you're better off contributing to a traditional tax deductible IRA.

I agree many 401ks suck, while all have their limits, vs the limitless possibilities of your own IRA. However, its my understandign you can only put 2000/year in a traditional IRA. Theoretically you can put a lot more into a company's 401k plan. PLus if you already have a roth, your yearly max for both combined is still only 2,000 total..whereas a roth w. a 401k allows for more savings..or am i totally incorrect?

Thoughts?>>


Read Steps 3 and 4 of my 13 Steps to Foolish Retirement Planning at http://www.fool.com/Retirement/Retirement.htm. Definitely take advantage of your 401k up to your employer's maximum matching level. After that, take a deep breath, step back, and evaluate your options. Often, with your next dollars you can do better than the plan, even in a fully taxable investment. You need to do a tax-equivalent analysis to see if you would. I suggest one method for doing so in Step 4. For your next $2K beyond your 401k, a Roth IRA can make emminent sense. After that $2K, a taxable investment may still make sense as well. BUT -- Ya gotta do the analysis to see if that's true.

Regards..Pixy

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Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10732 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/24/1999 10:19 AM
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Hey, guys, don't forget the tax benefit of a 401k, which serves to reduce your taxable income. If you're sitting right on the border between two brackets, it may be worth it to put the money into a 401k to reduce your taxable income.

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Author: edmay Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10738 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/24/1999 3:51 PM
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I'm contributing the max right now to 401k. I don't even have an employer match. I figure now, while I'm young, is a good time to put away $$ for retirement. I'm 33 and have been contributing for over 8 years now. I want to load up now and let compounding work for me for the next 30 years.

As I grow older, have children and bigger mortgage, I will pull back on my % contribution. Really, the opposite of what most end up doing. Most wait until they're older before sockin away retirement cash.

As a computer contractor I switch employers frequently. Each time I switch I pull all the 401k money out and into a Rollover IRA where I can manage it myself.

Ed

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Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10740 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/24/1999 4:54 PM
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Heck, Ed, I'd suggest that you roll all of your separate 401ks into a single self directed account. That way, you don't have to worry about managing ten accounts, you can just deal with one.

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Author: washu Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10768 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/25/1999 4:09 PM
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401K for all of company match.
IRA (Roth or Trad depending on circumstances.)
401K to Max or Taxable accounts depending on Quality of 401K investments.

***

What (s)he said!

I'll just add that if your employer offers an S&P 500 fund, it's a no-brainer to select it. Otherwise, go to your local library and look up the fund in Morningstar (and compare it to Vanguard Index 500).


Washu! ^O^

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Author: pikapp383 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10769 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/25/1999 4:12 PM
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401K for all of company match.
IRA (Roth or Trad depending on circumstances.)
401K to Max or Taxable accounts depending on Quality of 401K investments.

***

What (s)he said!

I'll just add that if your employer offers an S&P 500 fund, it's a no-brainer to select it. Otherwise,
go to your local library and look up the fund in Morningstar (and compare it to Vanguard Index
500).


Washu! ^O^


or.. www.morningstar.net

pikapp383

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Author: jlester Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10845 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/27/1999 7:44 PM
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While there's the $2000 limit per IRA, I don't believe there's a limit on the number of IRAs(traditional, non-Roth, I think)you can have, or am I missing something basic ??

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Author: Eski3 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10849 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/27/1999 11:16 PM
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You can have as many IRAs as you want, but you can only contribute up to $2000 per year to any or all of them.

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Author: Eski3 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10850 of 76397
Subject: Re: To 401k or not to 401k, that is the que Date: 5/27/1999 11:21 PM
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As I read my clarification I see that it's still not clear.... You can contribute up to a maximum of $2000 per year to IRAs, whether it's $2000 to one IRA or $200 to 10 different ones.

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