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401(k) Option Week.....
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<blockquote data-quote="air_dr" data-source="post: 1193329" data-attributes="member: 29929"><p>As far as what's best, my (perhaps completely useless) input is that it all depends on one's particular situation...</p><p></p><p>For example, if you are in a higher tax bracket, the traditional 401K can help lower your tax liability, and of course that's good. But, if you are in a low marginal tax bracket and there is no match, I believe having some regular investment account is far better because your dividends and capital gains get taxed at the lower dividends and capital gains rate. This does NOT happen for money invested in a traditional 401K.</p><p></p><p>Needless to say, I have barely scratched the surface of what there is to know. I am a saver by nature and am grateful that I have tried to educate myself on how to best save and plan for the future financially, and how I can lawfully "use the system" to my advantage. I would encourage others to really educate themselves as well. One useful thing to do among many is if you have your taxes done by a professional, take all of those tax forms and try to understand exactly what this person did and why and from there consider what you could do in terms of your money management to lower your taxes in the future.</p></blockquote><p></p>
[QUOTE="air_dr, post: 1193329, member: 29929"] As far as what's best, my (perhaps completely useless) input is that it all depends on one's particular situation... For example, if you are in a higher tax bracket, the traditional 401K can help lower your tax liability, and of course that's good. But, if you are in a low marginal tax bracket and there is no match, I believe having some regular investment account is far better because your dividends and capital gains get taxed at the lower dividends and capital gains rate. This does NOT happen for money invested in a traditional 401K. Needless to say, I have barely scratched the surface of what there is to know. I am a saver by nature and am grateful that I have tried to educate myself on how to best save and plan for the future financially, and how I can lawfully "use the system" to my advantage. I would encourage others to really educate themselves as well. One useful thing to do among many is if you have your taxes done by a professional, take all of those tax forms and try to understand exactly what this person did and why and from there consider what you could do in terms of your money management to lower your taxes in the future. [/QUOTE]
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