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I will be beginning a new job shortly and have a dilemna. My personal stocks have been returning at least 30% yearly returns while my 401(K) averages around 10%. I am not fully sure how much the 401(K) at my new employer will return, but for the sake of discussion let me assume 10% also.

Should I be putting my money into the 401(K) or into my personal stocks? I am currently paying 25% income taxes and figure I will retire by just cutting back on my work, rather than not working at all, thus probably still paying similar tax rates. I will, of course, have to pay long-term capital gains tax on my stocks (unless some political stuff takes place to stop that), so I figure that I'll be saving very little in terms of the benefit of pre-and post tax money 401(K)s are meant to achieve. I will also not be seeing any matching funds from my company, so thus lose that benefit of 401(k)'s as well.

Which would most of you invest in?



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