Ask Experts Questions for FREE Help !
Ask
    misssbmw's Avatar
    misssbmw Posts: 1, Reputation: 1
    New Member
     
    #1

    Mar 11, 2006, 07:06 PM
    401k
    I was listening to a Suzi Orman program where she is now saying, unless the employer offers a 40lK company match, do not contribute to a 40lK. The reason? The tax rates today are much less then they were 10,15,20 years ago.

    My company does not match, however I contribute 15% of my salary. I am 59 years old with approximately $140K in my plan. I also plan to work to age 65.

    Should I continue to contribute to my current 401K? My company also offers a Roth 401K
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
     
    #2

    Mar 11, 2006, 07:48 PM
    A lot will depend of course on your interest rates and tax rates.

    I can't image you will be getting a high enough interst rate with the Roth over the 401 K.

    I made about 16 percent on my 401 K using a mix of Vanguard investments last year, well worth my investment.

    It is a hard choice since many of the tax advisors are the same people who want to "sell" you the plan they have.

    With only 6 years left at this point I personally don't believe there could that much difference if you switched to another plan. But this is just my opinion from my own 401 K. Note I also have my original retirement plan which is a Roth and it earns a lot less interest every year
    fredg's Avatar
    fredg Posts: 4,926, Reputation: 674
    Ultra Member
     
    #3

    Mar 12, 2006, 05:41 AM
    Hi,
    I am 64, retired because of family health issues, and still have some money in my 401k plan.
    I would suggest just leaving it, as is, because you don't have that much more time left before you retire.
    As a side comment, please try to work until you are 65, eligible for Medicare. The cost of Medical Insurance without a company paying most of it now is out of sight!
    I am not asking what investment program you have your money in; such as all Stocks (some call it Equity market), or one such as both stocks and other (some call it Balanced), or the Fixed Income plan (paying only maybe 3% interest, or less).
    If not in some kind of Balanced Fund, you might check on it. Leaving it solely in a Fixed Income will not give very much more over a years' time.
    But, one has to be aware that a Balanced Fund is a little more "risky", but does pay more interest. Mine is in a Balanced Fund, and is still growing.
    I do wish you the best.
    walt17's Avatar
    walt17 Posts: 335, Reputation: 28
    Full Member
     
    #4

    Mar 12, 2006, 05:18 PM
    Greetings,
    I would add a few recommendations (opinions) for you to include in your considerations.
    Donít limit your retirement planning to your retirement date. Letís assume you are going to live for awhile. So plan for at least ten years post retirement. (15 is better) Otherwise inflation can beat you up a few years down the road. When you arenít able to do anything about it. With that in mind I would definitely continue adding to my retirement funds as long as I could without unreasonably depriving myself.
    When you consider the types of 401Ks, the Roth has a couple of advantages.
    1. You can delay withdrawing as long as you want. So you can let it continue growing tax free until you need it. Even though "retirement" is only a few years away, hopefully, "life" still has a lot of years in it.
    2. If you do need it sooner, say 2 years from now, you can withdraw your contributions (not gains) without paying taxes or penalty.
    If your companies ROTH plan doesnít meet your needs you can also open a ROTH IRA elsewhere. As Fred pointed out, there are various options. Depending on your total picture you may find something more to your liking elsewhere. Note: Iím not advocating the ROTH, I donít know enough about your personal situation. But it does deserve a look.
    Good luck with your planning.
    Walter

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

401k in two places [ 1 Answers ]

Hi - I currently have 2 401k's roaming about from previous jobs. I don't have one set up with my current employer. I am in a position where I need to get a hold of that money quick, but I'm not sure what my best options are. Any and all help would be greatly appreciated! Thank you!! :confused:

401k [ 1 Answers ]

My husband was laid of from his job due to downsizing last April. He had been with the company for a little over 4.5 years. We recently received notification that the company had taken back their matched contributions to his 401K leaving only his contributions. Is this legal? Is there any...

401K Tax [ 1 Answers ]

I worked in Nevada for 5 years with an H-1B visa. Now I am back to the school for my MBA degree in Atlanta, Georgia. I have $12,000 vested in my 401K Account. Since I am neither a US citizen nor a permanent resident, I am considering to cash my 401K and use it for my tuition. As I understand...

401k help [ 2 Answers ]

You may have answered this question from other members, but I just wanted to get something clear. I've left my job 6 months ago. My new job doesn't have a retirement plan that I can roll over my 401k to. I'm not really that interested in opening up an IRA account. I'm thinking about just cashing...


View more questions Search