All 401k's I've been in are pre-tax and the employers matching is pre-tax.

The last place I worked the people are no longer getting a match from the company, cheap bastards that they are.

Uh oh. Someone made the mistake of picking the wrong user name again ...

The company I work for just got aqcuired by another company. I used to get 25% matched up to 4% of my pay. Now, nothing. I never used it, but we were also able to borrow against our 401k (dad has always told me to NEVER borrow against my retirement). The new company does not give you that option. They do have other options that are good. Or will be once I have kids.

The 401k may not be as great, but our insurance premiums will be going waaay down (like 50%) with better benefits!

The ONLY way I would do post tax is if it means the money isn't taxed when it comes out at your retirement.

You're expecting? CONGRATULATIONS!

HEY! EVERYONE! LUV IS PREGGERS!

Let the rumors begin. :evil:

Let's hope it looks more like me than it does you!

If the rumors are gonna fly, might as well make them REALLY juicy!


ROFL ROFL ROFL

I suggest you contribute the max in your 401K that your budget will allow despite how much the employer contributes. 401K is entirely pre-tax.

Benefits are twofold:

1) It will reduce your taxable income
2) Allows you to save without paying taxes on your earnings (unless you pull out any $ for emergencies.

Many employers are now offering a Roth 401(k) this differs from a traditional 401(k) in that contributions are made after tax making the distributions at retirement tax-free. In a traditional 401(k) contributions are taken before taxes but when you take distributions at retirement they are taxable at your income tax rate.

There is no right answer as to which one is better for a given person's situation because it relies on factors that we don't know. Such as what will the income tax rate be when you retire?? (sounds like you are rather young and there is no telling what the tax rates will be 10 years from now, let alone 30 or 40.) Will the roth always be completely tax-free?

If you are young (under 40) the roth really makes sense because your money is going to double at least twice before you retire. Would you rather pay tax on $100 now, or $400 later? But being that so much is uncertain, I would recommend doing what I do;split it up half and half. And remember just because your employer only matches up to 5% doesn't mean that you can't contribute more. The limit this year is 15k. The more you put in now; the better off you will be for the future.

if you need money, do it the old fashion way...ROB A BANK

Personally I think 401 k's are a terrible investment, the match will be eaten up in fees you will be charged every single year. Save your money and invest it yourself.

Real Estate is the best investment over time-hands down-if you are looking for property-pm me.

wHAT nAME wOULD yOU pREFER?

cHIEFS eXPRESS?

aREA 51?

r8ER_h8ER?

cHIEFS mINOR sATELLITE?

yOU dECIDE.

Any growth is taxed when you take it out.

Your other options are to invest in the market if you feel brave enough to get into that game. Some do well, others bottom out.

A 401k is a retirement account, but it is not one that will keep you from sinking if you don't know how to handle your money.

ROFL Oh, they will.

Umm, no. If it was, no one would ever use it.

The decision on traditional vs Roth is basically a bet on whether your tax rate will be higher or lower when you retire. If you are currently in the 25% marginal rate and retire in the 15 or lower, then the traditional IRA/401k is the smart move, and the Roth would be foolish. IF your currently in the 15 and retire into the 25 (right now thats mostly only older government or auto workers with huge pensions) then the traditional would have been a foolish choice and the Roth would be the smart move. If your tax is the same its a wash and it doesnt matter which way you go.

Now, many people look at this and think "well, OBVIOUSLY I'll retire in a higher bracket." I'm not so sure, especially when you pencil it out.

The amount of income you need to qualify for each bracket increases every year and will continue to do so. If you earn say 50,000 now and plan to earn about that much in taxable money when you retire since you have fewer expenses (kids are gone, home paid for, etc) then your overall tax bill actually decreased because less of your money is taxed with the ratcheting up of the brackets. Finally, even if your in the 25% now and 25% when you retire, the traditional may still be better since after the cutoff point between 15 and 25 increases every year for decades, there's a good chance that less of your money will be in that bracket than now. A lot of people overestimate how much money and taxes they will receive and pay when they retire.

The only way a Roth makes sense is if: 1) You pay next to nothing in taxes now, or 2) Your going to have a HUGE increase in income and/or have generous pension plans supplementing social security and savings when you retire with an income increase far and above the annual increase of the tax brackets, or 3) Youve already contributed as much pre-tax as you can under the law.

Little strategic advice, if your situation is that you have both tax deferred and tax free retirement investments, I would put your riskier investments into the tax-free portion. That way, if you hit the ball out of the park, those gains are tax free while your safer investments with lower gains in the deferred part produce fewer tax liabilities.