| Investing in my no-match 401(k) |
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jeberle
First Time Poster
Cash: $ 0.00
Posts: 1
Joined: 22 Dec 2004
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| Investing in my no-match 401(k) |
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My firm has a no-match 401(k) for highly-compensated employees. While I disagree with that characterization of my income (I am in the 30% tax bracket), I am seeking advice on how much of my income (%) I should invest. I probably spend 70% of my monthly income on bills, necessities. Any advice?
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Wed Dec 22, 2004 4:34 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
Posts: 390
Joined: 05 Oct 2004
Location: Illinois
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I typically recommend deferrals as follows:
1) up to your employer's match (e.g., 50 cents on the dollar for the first 5%) into the regular 401(k)-type account
2) max out Roth IRA (as your income allows)
3) finish maxing out regular 401(k) contributions (from #1 above if available)
4) max out other deferred arrangements (such as your hce account)
5) as long as you're not overexposed, take advantage of any available ESOP arrangements offered at a discount
6) education funding (where tax deferrals are allowed)
Hope this helps -
Jim Blankenship, CFP�, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Wed Dec 22, 2004 10:53 pm |
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salem62
Member
Cash: $ 2.80
Posts: 14
Joined: 23 Dec 2004
Location: Detroit, MI
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I agree with contributing to a 401k to the extent of the employer match since you are gettin free money. Also, contributing the maximum to a Roth IRA is a fabulous strategy since this grows completely tax free. Most money professionals will suggest stock market based investments.
My my idea of diversification is to invest responsibly in the tax advantaged stock market based investments, but then allow yourself the freedom to branch out. Do you have a hobby that you could make money with, have you always wanted to own your own business, or rental home, or maybe you have an invention that could benefit mankind. Take time to think about what you enjoy doing in your spare time and chances are there is a passive income or investment that suits you.
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Thu Dec 23, 2004 7:06 pm |
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xboxundone
Senior Member
Cash: $ 67.83
Posts: 795
Joined: 19 Sep 2004
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quote:
Originally posted by BlankenshipFP
I typically recommend deferrals as follows:
1) up to your employer's match (e.g., 50 cents on the dollar for the first 5%) into the regular 401(k)-type account
2) max out Roth IRA (as your income allows)
3) finish maxing out regular 401(k) contributions (from #1 above if available)
4) max out other deferred arrangements (such as your hce account)
5) as long as you're not overexposed, take advantage of any available ESOP arrangements offered at a discount
6) education funding (where tax deferrals are allowed)
Hope this helps -
All of this is great info and i completely agree As you want to maximize your dollar for what you pay in taxes (if you setup your investments right should be very little ' )
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Thu Dec 23, 2004 7:10 pm |
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