401k

[Hugh R]

I've put money away ever since my first year out of college. I'd like very much to put away more. I sort of remember what Big Ed was referencing, I read somewhere once that if you took the entire US adult population and divided the amount of "retirement" money actually socked away by those people, not what your employer or SS (hah!) is holding for you (Hah! again) then it was some pitiful amount like less than $1,000 per capita.

[Drago]

Max it early, every year. Take the remainder (for the year) and invest it in an IRA.

[masraum]

My minimum is whatever I can get the company to match. I then go as far past that as I can and still pay my bills. My company will match 50% of the first 6%, so a max of 3% of my salary. I also vest 25% a year from the time of my hire.

[1973911s]

Great to see that over 50% are maxing it out each year. My company starting automaticly enrolling the employees, which has been good, as it helps balance out, and is also showing these employees that they don't miss 2% of there paycheck.

Michael

[Rondinone]

The greatest thing about a 401k is that the money just goes away every paycheck without me seeing it. No chance to spend it on something else. Wife and I both max out.

[widgeon13]

I think the thing that many overlook is the value of compounding and not having to pay taxes on that growth/appreciation until one starts to make withdrawals. I always fully funded my 401K and then max'd out on an IRA for both my wife and myself.

[88cs]

I max out, have since I've been working, and at one point got a plan where you could put it into individual stocks, put it all on one, and got really lucky. I would not ever seriously recommend doing that, but I am a huge advocate of 401's.

It's kind of funny, I'm 45 and have seven figures, but I still max out from habit. My company matches some, but not much.

I'll bet, though, that when I/we get to retirement age, your SS payout is going to be at least partially pegged to what you have in your own retirement accounts, not necessarily what you contributed to SS.

[trj911]

I get a matxh from Big Brother so I max it out.

[Bill Verburg]

Since most people can contribute to a Roth, lets leave it as an option in the mix.

What's best depends on what happens to future tax rates.

The Roth is better if future rates are greater than present rates
the 401/403 is better if future rates are less than current rates.

Since no one can accurately predict future rates(though many of us suspect what will happen) a mix of Roth and 401/403 is indicated.

As mentioned, employer match is free money and ought to be taken advantage of fully, after that I would max the Roth then max the 401/403

A third vehicle, the annuity is an option if everything else has been fully funded, it is an insurance policy w/ an investment component that can be advantageous to a small % of the population.

Whatever you do, never buy an annuity or other tax favored product(like municipal bonds) inside of a 401/403 or Roth. There are unscrupulous people in the financial industry that will try to sell you such a product.

[Shuie]

So, what about a 529? Anybody have those for the kid's college or whatever? Seems like they are as good as anything else out there.

[Bill Verburg]

Originally posted by Shuie
So, what about a 529? Anybody have those for the kid's college or whatever? Seems like they are as good as anything else out there.

That would depend on choices, fees and individual circumstances, I know little about them but most of what I have heard hasn't been real positive.

The nice thing about a Roth is you can withdraw principle at any time for any purpose w/o incurring penalty/fee or or tax consequences and you can take interest/dividends/capitol gains out for higher education, but you will have to pay income tax on that money.