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<< Does this sound right? >>

It sounds to me like you have a good understanding of the ramifications of your options.

<< I'm happy with my 401(k) investment choices, and I like the ease of automatic paycheck deductions. But based on the full picture, it seems like the brokerage account is the way to go. Does it sound like I'm on the right track? When would someone want to make after-tax contributions to their 401(k)? >>

I think this depends on where you want to invest. If your choices are going to produce a lot of ordinary income (short-term gains, dividends, and interest), you're just as well off having them in a 401(k). If you're going to invest in LTBH stocks that don't pay dividends, you're probably better off in a taxable account.

You can combine the convenience of payroll deduction with stock purchases in a taxable account. Just have a pay allotment put into a savings account, and periodically use that account to fund your stock account. You may also be able to set up an automatic allotment directly to your brokerage account. Check with your payroll office and your broker.

Phil Marti
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