Fara
 |
Do you get the option of putting money in as tax deferred? If you just put 10% in, your company puts that same amount in so it is like you have an instant doubling of your investment. Not to mention that if it is taxed deferred you could lower your pretax income so you pay less in taxes that year. Besides, it's good to put money in while prices are low, so they actually have some where to go. If you buy while prices are high, there is a limit to how much higher they can go. |
brckr1
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This is probably the best benefit a company can offer you and with usually only 4 years until your fully vested, you can't lose. The tax savings alone are great and it builds.......how old are you? the younger you are the better...put in as much as you can afford and don't wait, start now!!! believe me, before you know it your account will be....wow...ps...if it still allows, you can borrow against it to buy pretty much anything and then pay yourself back with interest...no lose situation........... |
donwhy60
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It is always good to invest, but what you invest in is the issue. Right now the market is slumping, but as always it will rebound. Not a bad idea to invest now when stocks are at a low price and watch your investment grow as the market gets better. A 401K is a long term investment and you have to be able to handle the ups and downs of the market. There are other benefits to investing in a 401K such as tax breaks. Hope this helps! |
exactduke
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I would not be passing up a 10% match, no matter how bad the economy is.
By the way, I don't think the economy is all that bad. Compared to some of the downturns we've had in the past, this one is fairly tame (just my opinion of course). |
jpocia03
|
I would say that with the match it's too good to pass up right now.
However, make sure that you have a good grip on your debts as well. IMO a mortgage is a good debt to have because it provides you with a tax benefit. That could be the reason that paul allen, bill gates and warren buffet have one. I mean it doesn't make sense to defer your investments, if it's costing you an arm and a leg from creditors and what not.
In addition, you should think about considering the tax implications of each and every investment that you have. Most media and other sources tell you that your going to be in a lower tax bracket at retirement so, you should defer your retirement investments. I could argue this until I'm blew in the face. why? Because when you are retired, you will no longer have a mortgage, 401k investing (which helps your current tax bracket), and your children will no longer be dependants. However, if at retirement you are only going to be making 15k a year between social security and retirement distributions, then yeah I guess you might be in a lower bracket. But keep in mind that the tax regulations and codes are changing every year, so no one knows how your earnings are going to be effected.
Look in a ROTH, and some whole life insurance. They do not require MANDATORY distributions, and do not effect any other income sources from a taxation standpoint.
Also, make sure your current accounts and financial health is protected. Disability insurance, health insurance, auto, hazard and limited liability policy as well.
Quick lesson:
Do you really know how your auto insurance works?
Your pocket book opens from 0-?(your deductible), and the insurance companies checkbook opens from ?(your deductible), to the max of your coverage. If there is a lawsuit or any damages that exceed that amount, then your checkbook opens once again. That is why it's a good idea to have a liability or umbrella policy, so that it can take over from where your max. coverage on your auto is to approx. 1 million or 2 million. How can you pay for this? Normally it is only $100-$200, more per year. But if you have your deductible set too low, and knowing that if you file a claim it would increase, then what is the maximum you would pay out of pocket before filing a claim? $1,000? If you are currently at $500.00, just increase your deductible to $1,000, and that should provide you with the annual savings to then get the umbrella, with no out of pocket cost.
Just a thought.
Hope you had your question answered. |
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