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In Sweden these kinds of schemes just pushes up the tax to the future once you take the money out. And in Sweden pensioners are the hardest tax - making this a

by seivan 13y ago

In Sweden these kinds of schemes just pushes up the tax to the future once you take the money out. And in Sweden pensioners are the hardest tax - making this a horrible deal.

rg81 13y ago
Interesting. Most companies nowadays offer a "Roth" option for 401(k) which takes contributions with after tax dollars so when you are ready to get your money back out at 59.5, all of the growth is tax free. You only have to pay taxes on what your employer matches.
- inyourtenement 13y ago
  For myself (young-ish, high-ish income) I've determined that Roth is a bad deal. Conceptually, Traditional and Roth are about equal. Paying taxes now vs paying them in retirement is a wash, all else being equal. But with a Traditional 401(k), the tax savings are at my highest marginal tax rate. In retirement, I would not expect to be in the same tax bracket.
  - arielweisberg 13y ago
    A Roth is a better deal than post tax investing. It's not either or depending on income. The advantage of a Roth is that you control it and it isn't in expensive employer controlled funds. I say max out your Roth and then max out your 401k. If your spouse works, max out their Roth IRA as well. Definitely take advantage of any tax incentives being offered over post tax investing. edit I misread. I would take the employer offered 401k with the 17.5k contribution limit. Get the money out there earning for you. You can do your own Roth IRA. That is what I am talking about doing separate from your employer. I would max that out first assuming the funds are better. I prefer today dollars (401k) over future dollars (Roth) so the 401k is more attractive to me modulo terrible fund selection. edit
    - inyourtenement 13y ago
      Oh, I should have clarified. I was thinking of Roth 401(k) vs Traditional 401(k). I do have a Roth IRA because there are income limits for the tax deduction from a Traditional IRA. And as you say, any tax-advantage is worthwhile.
aestra 13y ago
In the US, your capital gains grow tax free, making it an awesome deal. You only pay when you take the money out. We also have Roth IRAs which are tax free when you take it out. You pay tax when you put the money in. I would suggest the OP creates an (Roth?) IRA and maxes that out too.

by seivan 13y ago

In Sweden these kinds of schemes just pushes up the tax to the future once you take the money out. And in Sweden pensioners are the hardest tax - making this a horrible deal.

rg81 13y ago

Interesting. Most companies nowadays offer a "Roth" option for 401(k) which takes contributions with after tax dollars so when you are ready to get your money back out at 59.5, all of the growth is tax free. You only have to pay taxes on what your employer matches.

inyourtenement 13y ago
For myself (young-ish, high-ish income) I've determined that Roth is a bad deal. Conceptually, Traditional and Roth are about equal. Paying taxes now vs paying them in retirement is a wash, all else being equal. But with a Traditional 401(k), the tax savings are at my highest marginal tax rate. In retirement, I would not expect to be in the same tax bracket.
- arielweisberg 13y ago
  A Roth is a better deal than post tax investing. It's not either or depending on income. The advantage of a Roth is that you control it and it isn't in expensive employer controlled funds. I say max out your Roth and then max out your 401k. If your spouse works, max out their Roth IRA as well. Definitely take advantage of any tax incentives being offered over post tax investing. edit I misread. I would take the employer offered 401k with the 17.5k contribution limit. Get the money out there earning for you. You can do your own Roth IRA. That is what I am talking about doing separate from your employer. I would max that out first assuming the funds are better. I prefer today dollars (401k) over future dollars (Roth) so the 401k is more attractive to me modulo terrible fund selection. edit
  - inyourtenement 13y ago
    Oh, I should have clarified. I was thinking of Roth 401(k) vs Traditional 401(k). I do have a Roth IRA because there are income limits for the tax deduction from a Traditional IRA. And as you say, any tax-advantage is worthwhile.

aestra 13y ago

In the US, your capital gains grow tax free, making it an awesome deal. You only pay when you take the money out. We also have Roth IRAs which are tax free when you take it out. You pay tax when you put the money in. I would suggest the OP creates an (Roth?) IRA and maxes that out too.