Skip to main content
No. of Recommendations: 0
<< 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.

TMF ExRO
Phil Marti
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.