Re: maxing a 401k
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For most people the optimal retirement savings strategy is to:
1) Contribute enough to your 401(K), 403(B), TSP, etc. to maximize the company match
2) To diversify your tax benefits max out Roth IRA to IRS limits ($4K in 2007, $5K in 2008)
3) If you have extra money to save and the desire to do so contribute additional funds to your 401(K), etc. up to the IRS max ($15.5K in 2007, $16K in 2008)
4) Funnel any additional retirement savings into a regular taxable brokerage account. A low cost index fund is a pretty tax efficient investment to hold in a taxable account.
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Yeah, great advice for about 99.9% of all workers in US. I'll add one thing, which is that with a Roth you can later withdraw your original contribution amount with no penalty whereas you generally don't have that sort of option with the other tax-protected accounts, or at least not with the same ease the Roth offers.
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