Comments on: Don’t Max Out Your 401k Annually http://www.journeyofsuccess.net/2009/08/dont-max-out-your-401k-annually Piggy's Blog Wed, 07 Apr 2010 18:37:31 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Kin http://www.journeyofsuccess.net/2009/08/dont-max-out-your-401k-annually/comment-page-1#comment-12249 Kin Mon, 17 Aug 2009 05:49:45 +0000 http://www.piggysblog.com/?p=1585#comment-12249 @Meg, sorry for the confusion. You caught me on that one. My arguments ARE for 401k and not for Roth IRA. Well, there is possibility of changes in tax law that minimize the benefits of Roth in future (income tax is gone but tax on everything else...haha) Well,it's a weak argument. Anyways, not maxing, having Roth IRA is just my own peculiarity. I like to keep things simple instead of having so many accounts. Gives me peace of mind, which to me, trumps everything else. Financial common sense speaking, that is stupid. My personal belief is, if we do 50% of the "right" things in life (all aspects of life, not just financial), things will work out in the end. Well, I do, to the best of my awareness, beyond 50% already and so, I try to keep things simple. In Roth IRA's case, I decide not to have the extra account, because its effect is minimal in terms of what I want as "enough" in my own future. Recalling the third last argument, it compliment this "50% idea" in that, and I dare to say, most people who end up in very "messy situation" in their life namely they never do 50% of the things in their life with such attributes (responsibility, discipline, foresight, awareness, compassion, respect...) Anyways, a whole other topic. @Meg, sorry for the confusion. You caught me on that one. My arguments ARE for 401k and not for Roth IRA. Well, there is possibility of changes in tax law that minimize the benefits of Roth in future (income tax is gone but tax on everything else…haha) Well,it’s a weak argument.

Anyways, not maxing, having Roth IRA is just my own peculiarity. I like to keep things simple instead of having so many accounts. Gives me peace of mind, which to me, trumps everything else. Financial common sense speaking, that is stupid.

My personal belief is, if we do 50% of the “right” things in life (all aspects of life, not just financial), things will work out in the end. Well, I do, to the best of my awareness, beyond 50% already and so, I try to keep things simple. In Roth IRA’s case, I decide not to have the extra account, because its effect is minimal in terms of what I want as “enough” in my own future.

Recalling the third last argument, it compliment this “50% idea” in that, and I dare to say, most people who end up in very “messy situation” in their life namely they never do 50% of the things in their life with such attributes (responsibility, discipline, foresight, awareness, compassion, respect…) Anyways, a whole other topic.

]]> By: Meg http://www.journeyofsuccess.net/2009/08/dont-max-out-your-401k-annually/comment-page-1#comment-12248 Meg Mon, 17 Aug 2009 05:05:00 +0000 http://www.piggysblog.com/?p=1585#comment-12248 The one sentence that confuses me is your last - your arguments don't really apply to Roth IRAs (or even Roth 401ks for that matter). Why wouldn't you want to max one of those?? Especially in light of the fact that it's a nice complement (tax diversity wise) to your traditional 401k. With a Roth IRA you pay taxes now - at historically low tax rates - and then you never pay taxes on any growth or any withdrawals EVER. Oh, and you can also take out all of your contributions (not earnings) at any time with no taxes or penalties. If you're investing at all (which, granted, not everybody should be doing) and you qualify for a Roth IRA then there's no good reason to pass it up. The one sentence that confuses me is your last – your arguments don’t really apply to Roth IRAs (or even Roth 401ks for that matter). Why wouldn’t you want to max one of those?? Especially in light of the fact that it’s a nice complement (tax diversity wise) to your traditional 401k.

With a Roth IRA you pay taxes now – at historically low tax rates – and then you never pay taxes on any growth or any withdrawals EVER. Oh, and you can also take out all of your contributions (not earnings) at any time with no taxes or penalties.

If you’re investing at all (which, granted, not everybody should be doing) and you qualify for a Roth IRA then there’s no good reason to pass it up.

]]>