Comments on: 401(k) With Company Match or Roth IRA? http://www.moneyunder30.com/401k-company-match-roth-ira Personal Finance for the Young and Ambitious Fri, 19 Mar 2010 21:32:50 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: John @ Curious Cat Investing Blog http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2078 John @ Curious Cat Investing Blog Thu, 26 Feb 2009 23:57:15 +0000 http://www.moneyunder30.com/?p=1358#comment-2078 Adding to the Roth IRA (if no matching) is good for at least 2 reasons. First you can choose where to invest, instead of being locked into the normally limited options for a 401(k). Also you diversify your tax risk. Since we are spending money we don't have and creating huge unpaid bills that must be paid at some point it seems likely tax rates will rise. If that happens money in a Roth IRA will be more valuable than money in a non-roth 401(k) that you. Roth 401(k)s are starting to become popular. Adding to the Roth IRA (if no matching) is good for at least 2 reasons. First you can choose where to invest, instead of being locked into the normally limited options for a 401(k). Also you diversify your tax risk. Since we are spending money we don’t have and creating huge unpaid bills that must be paid at some point it seems likely tax rates will rise. If that happens money in a Roth IRA will be more valuable than money in a non-roth 401(k) that you. Roth 401(k)s are starting to become popular.

]]> By: val http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2079 val Tue, 17 Feb 2009 21:23:08 +0000 http://www.moneyunder30.com/?p=1358#comment-2079 Question: Hi all, I am hoping for a bit of insight - my company only matches 1% of my total contribution for my 401K. How much should i be contributing - with the current instability of the market. For the past 4 yrs i have contributed the max amount (15%) however now i am reconsidering - but looking for some professional advice. PLEASE HELP. THANK YOU Question: Hi all, I am hoping for a bit of insight – my company only matches 1% of my total contribution for my 401K. How much should i be contributing – with the current instability of the market. For the past 4 yrs i have contributed the max amount (15%) however now i am reconsidering – but looking for some professional advice. PLEASE HELP.

THANK YOU

]]> By: Money Under 30 http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2081 Money Under 30 Thu, 12 Feb 2009 22:05:14 +0000 http://www.moneyunder30.com/?p=1358#comment-2081 Interesting dilemma, Jason. For most people Donnie is right, but you're in a unique situation. The costs in the Bay Area are so much greater than the rest of the country (and the incomes are higher accordingly). I don't think anybody would blame you for plugging more into the 401k over a Roth to reduce your tax basis a little bit now, even if the pure numbers suggest the Roth is the way to go (which I can't say for sure). Good luck! Interesting dilemma, Jason. For most people Donnie is right, but you’re in a unique situation. The costs in the Bay Area are so much greater than the rest of the country (and the incomes are higher accordingly). I don’t think anybody would blame you for plugging more into the 401k over a Roth to reduce your tax basis a little bit now, even if the pure numbers suggest the Roth is the way to go (which I can’t say for sure). Good luck!

]]> By: Jason http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2077 Jason Wed, 11 Feb 2009 16:47:17 +0000 http://www.moneyunder30.com/?p=1358#comment-2077 Makes sense. But is there benefit in lowering my tax basis right now? I live in the Bay Area so my income is fairly high by national standards even though I'm far from rich, but that means I get hit worse at tax time. I had been contributing the 10% in part to try and keep my tax basis lower, and because I already make too much to contribute anything to my Traditional IRA anymore. Makes sense. But is there benefit in lowering my tax basis right now? I live in the Bay Area so my income is fairly high by national standards even though I’m far from rich, but that means I get hit worse at tax time. I had been contributing the 10% in part to try and keep my tax basis lower, and because I already make too much to contribute anything to my Traditional IRA anymore.

]]> By: Donnie http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2080 Donnie Tue, 10 Feb 2009 21:51:15 +0000 http://www.moneyunder30.com/?p=1358#comment-2080 Jason: I believe it may be better to put the 2nd 5% into the Roth IRA if you are younger, as you will most likely be taxed at a higher rate when you withdraw the funds from the 401k later in life. Not sure, that is the general idea, though. Jason: I believe it may be better to put the 2nd 5% into the Roth IRA if you are younger, as you will most likely be taxed at a higher rate when you withdraw the funds from the 401k later in life.

Not sure, that is the general idea, though.

]]> By: Jason http://www.moneyunder30.com/401k-company-match-roth-ira/comment-page-1#comment-2076 Jason Tue, 10 Feb 2009 20:36:42 +0000 http://www.moneyunder30.com/?p=1358#comment-2076 So here's a follow-up question; let's say that I'm contributing 10% to my 401k. My company match runs out at 5% so half of what I put in doesn't generate a match at all. Are you saying this is a bad use of my money, and that I should allocate it someplace else (such as my Roth IRA) first, before I start dumping extra into my 401k? So here’s a follow-up question; let’s say that I’m contributing 10% to my 401k. My company match runs out at 5% so half of what I put in doesn’t generate a match at all. Are you saying this is a bad use of my money, and that I should allocate it someplace else (such as my Roth IRA) first, before I start dumping extra into my 401k?

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