Posted by Rook (FL) on October 12, 2004 at 14:31:21:
Just a quick little side note if you invest in a Roth IRA it won’t count against your social security where, as you mentioned, a traditional IRA may. Also a Roth will protect you from any kind of interest rate increase. Just a little FYI
Reduce 401K contribution for possible investment - Posted by CAguy
Posted by CAguy on October 12, 2004 at 12:14:56:
This is kind of trivial but I am thinking for reduce of 401K contribution so I can have more cash to do RE and stock investment plus some breathing room. The concept is that I can better invest my money now, especially in RE, versus wait for retirement which is depending on stock market and mutual funds. Currently I max my contribution but I want to reduce it to 60%.
Have anyone done this? Does this make sense?
Thx
Re: Reduce 401K contribution - good to keep - Posted by CAguy
Posted by CAguy on October 12, 2004 at 14:00:37:
Yes my employer, state of CA, does match our contribution. Well it seems like to save tax, and realize future growth, it should continue to max my 401K. Thanks very much guys.
Cheers,
James
Re: Reduce 401K contribution - Posted by arlanj
Posted by arlanj on October 12, 2004 at 13:28:53:
The most obvious reason not to do it is that for every $100 that you don’t put into the 401K, you will pay at least 15% federal tax and probalby another 7% state tax.
Re: Reduce 401K contribution for possible - Posted by Winston
Posted by Winston on October 12, 2004 at 12:56:56:
If your employer matches your contribution then
stay with the 401K and continue your contribution.
Unless you are in a very high tax bracket I would
not fund a IRA or SEP Ira, instead I would do the
mobile home investing. I have always thought the
Ira’s are over sold by the banks, insurance companies
etc. With the baby boomers retiring, budget problems
being created in the next 10 to 15 years the Ira
money that will be withdrawn when you retire will
in my opinion be counted against you for social
security and Medicare. Plus it is also my opinion
the tax rates will be much higher at that time
then now.
Winston
Re: Reduce 401K contribution for possible REI… - Posted by Randy (SD)
Posted by Randy (SD) on October 12, 2004 at 12:34:41:
My personal opinion is don’t do it… in my former position I was contributing 15% to my 401(k) I never missed the contribution (because it was money I never saw in the first place) and one day I checked my account and it was worth $150,000. Granted it took several years for this to occur but all of a sudden were talking some real money here.
Think of it this way if you make $100,000 a year and contribute the maximum 15% that’s $15,000 a year, if you contribute 60% of the max as you’re suggesting that’s $9000 a year… is $6000 a year going to change your real estate investing strategies? You could probably cut $6000 a year in your budget many other ways than borrowing from your future, just my thoughts on it-contribute the maximum, you’ll never miss it.
Re: Reduce 401K contribution - good to keep - Posted by CAguy
Posted by CAguy on October 12, 2004 at 18:33:57:
Just another quick question, can we use/withdraw part of 401K for kids/wife/yourself colledge college eduction. I don’t think so but maybe there is a way. I don’t want to reduce my contribution, pay tax, so I can put some cash in 529.