#1
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To Max 401k or contribute to Roth
I can contribute up to 50% of my salary to my 401k, so that's obviously not going to ever happen anytime in the next few decades. So i guess I am really limited by the 15 grand, however thats still edging on a third of my pre-tax income which is pretty high.
Should I save 4k a year to put in Roth IRA (after expenses, 401k to match 50% up to 7%, bonds/other savings)? Or not even use the Roth until I am hitting the federal max for 401k? I'm thinking, as you guys say, diversification of asset locations, and putting in 3K-4K a year (trying for 4, 3 if saving doesn't work as well in the real world as it does in my excel sheets as i approach graudation) into a Roth would be prudent. EDIT : Also, I only get an international, large cap blend, and small cap blend index fund through the 401k (there are a couple more choices, but not really worth mentioning), so a Roth would help me diversify into REITs, Large Value and Small Value indexes as well. Speaking of the fund choices, they are really nice; institutional vanguard funds with like 0.03% ERs, 100 million dollar min. investment. VIIIX, VSCIX, and VIDMX |
#2
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Re: To Max 401k or contribute to Roth
What I would do is sit down and decide how much you are planning to put away each month then:
1. Make sure your 401k gets the full company match 2. Fund your Roth 3. put excess money in 401k Granted you want to establish what 3 is going to be before you actually do 2 but make sure 1 and 2 are planned out first |
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