YA401KQ

[KMurphy]

Currently, I'm investing in my company's pre-tax retirement savings plan. I presently have a low income tax liability because I have 5 dependants (spouse and 4 children). My concern is how much I will be taxed when collecting during retirement. Due to my present low tax liability, is it worthwhile to invest 0-100% of my retirement investment to the after-tax plan? I would feel comfortable knowing the amount building the the plan is 100% covered from a tax perspective. Let me know your thoughts.

 

[JS80]

what's your effective tax rate, and does your company match? actually, what's your marginal tax rate and what's your state income tax rate?

 

[hellokeith]

If they match, then put in the max that they match. Anything above that should go in other funds, including after-tax investments.

 

[KMurphy]

Federal is about 5%, state is about 3%. I invest 9% and company matches 7%.

 

[DaveSimmons]

This is what most people recommend, in order (also stay out of credit card debt, and put some emergency money into a high-interest savings account)

1. put in to 401k up to employer match (free money!)
2. Roth IRA (vanguard.com is a good place for this)
3. tax sheltered college savings for the kiddlies
4. more 401k up to max
5. unsheltered regular brokerage account, invested in stock index mutual funds

 

[RaiderJ]

Originally posted by: DaveSimmons
This is what most people recommend, in order (also stay out of credit card debt, and put some emergency money into a high-interest savings account)

1. put in to 401k up to employer match (free money!)
2. Roth IRA (vanguard.com is a good place for this)
3. tax sheltered college savings for the kiddlies
4. more 401k up to max
5. unsheltered regular brokerage account, invested in stock index mutual funds

Good advice

 

[JS80]

Originally posted by: RaiderJ

Originally posted by: DaveSimmons
This is what most people recommend, in order (also stay out of credit card debt, and put some emergency money into a high-interest savings account)

1. put in to 401k up to employer match (free money!)
2. Roth IRA (vanguard.com is a good place for this)
3. tax sheltered college savings for the kiddlies
4. more 401k up to max
5. unsheltered regular brokerage account, invested in stock index mutual funds

Good advice

Seconded