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The big advantage of 401k is that it is a tax deferred account which can be a good amount depending on your tax bracket. Also they don't have to be limited to j

by gcheong 16y ago

The big advantage of 401k is that it is a tax deferred account which can be a good amount depending on your tax bracket. Also they don't have to be limited to just a small number of funds, some companies also provide the option to invest on your own( if this is not an option at you company, have a chat with the person running the benefit plan) and if you leave you can roll it over to a rollover IRA at any broker you want. Finally, if your company does provide a match, that is money you are essentially throwing away for what is usually a very small percentage of your salary.

watmough 16y ago
You have written down the generally promulgated wisdom. i.e. what you're being sold by Wall St and the Government. However, if you actually need to withdraw any of these savings ahead of time, you're looking at a 10% penalty. And who's to say that taxes won't have risen on 'fat-cat' retirees in 10 or 20 years. Why not take the (known) risk now, pay your taxes and have risk-free savings now. What about another market crash? Can you invest in property, or in metals, in a 401K? Can you avoid 2% mutual fund fees. I posted elsewhere in the thread, but think very carefully before pumping a lot of money into a 401K. 20 years is a long time for the government to keep the value of money stable, or for Wall Street to not sucker you in a crash, or for fees to T Rowe Price to eat away your nest-egg. If I had another opportunity, I'd sock 5% away in a 401K into Treasuries, and put the rest in cash and metals. There's a reason banks have vaults with gold, silver, platinum etc. Answer this question: Do you trust Wall St and the government with your money for 30 years for the small benefit of maybe a 10% tax saving, or do you actually want to maintain the control of, and the value of that money, by paying regular taxes on it now.

by gcheong 16y ago

watmough 16y ago

You have written down the generally promulgated wisdom. i.e. what you're being sold by Wall St and the Government. However, if you actually need to withdraw any of these savings ahead of time, you're looking at a 10% penalty. And who's to say that taxes won't have risen on 'fat-cat' retirees in 10 or 20 years. Why not take the (known) risk now, pay your taxes and have risk-free savings now. What about another market crash? Can you invest in property, or in metals, in a 401K? Can you avoid 2% mutual fund fees. I posted elsewhere in the thread, but think very carefully before pumping a lot of money into a 401K. 20 years is a long time for the government to keep the value of money stable, or for Wall Street to not sucker you in a crash, or for fees to T Rowe Price to eat away your nest-egg. If I had another opportunity, I'd sock 5% away in a 401K into Treasuries, and put the rest in cash and metals. There's a reason banks have vaults with gold, silver, platinum etc. Answer this question: Do you trust Wall St and the government with your money for 30 years for the small benefit of maybe a 10% tax saving, or do you actually want to maintain the control of, and the value of that money, by paying regular taxes on it now.