I have $75 taken out of check for UPS stock and roughly $75 taken out for 401k. Thinking about doubling up on the 401k and stopping the the stock purchase. The stock has seemed to flatline although it does pay dividends. While the 401k is now climbling up. Any thoughts?
401 k vs. U.P.S. stock
- Thread starter dcdriver
- Start date
brown bomber
brown bomber
the 401K....has both significant upside and downside rewards...if you have the time to actively manage the account and understand the the reward vs. risks of your investment......on top of that you realize a considerable tax advantage w/ the 401K...the UPS stock should be considered a long-term investment, at least that's how I treat it....discounted stock price + dividend reinvestment
Highwayman
Well-Known Member
I wouldn't completely bow out of the stock but maybe you could put more into 401k and less in stock. Hope you are doing the DRIP too. Also consider starting a Roth IRA with some mutual funds in it. I like this cause it isn't taxed when you take the money out!
feederdriver06
former monkey slave
Where you put your money should depend on what your trying to accomplish. Company stock would be a loooong term thing - for me I made my money on the company stock and sold while it was high. I got what I wanted and got out and have never looked back and won't put any money there again-I'm not down with the loooong term thing. The 401k I like, and once again , it depends on what you are trying to accomplish. I went 100% stable value fund back in 2001 when the market started to melt down and have never looked back. I put between 250.00 to 300.00 a week in my account. ALL of my money since 2001 that I have deposited in there is still there. I lost NOTHING with the recent collapse of the stock market. I am very happy with a 2-5% return on my money and am on target to hit my personal desired dollar amount at retirement. The only thing I want to accomplish with my 401k is that all of my money that comes out of my paycheck weekly that I put there I want to be there when I retire(stable value fund is the best option for this IMO). I have absolutely zero concern with how much gain I make on my money and at the same time there is nothing for me to have to actively manage. This is perfect for me but may not be perfect for someone else.
A
anonymous6
Guest
max out the 401k .
my balance is well over 6 figures.
I put $10 a week in the stock.
my balance is well over 6 figures.
I put $10 a week in the stock.
Max out a Roth IRA out for you and your spouse before you think of putting anything in a 401 or buying UPS stock. I dont know how old you are but you rest assure Uncle Sam will take at least half of your 401 when you are of age to take it out. The growth on a Roth is tax free. It will be all your money. Invest in index funds and stay away from those stupid
stock broker who will want 2 percent going in and 2 percent going out.
Just my 2 cents for what its worth
stock broker who will want 2 percent going in and 2 percent going out.
Just my 2 cents for what its worth
UpstateNYUPSer(Ret)
Well-Known Member
There are no upfront tax advantages of a Roth IRA--the advantage comes when you take your money out.
Contributions to your 401k reduce your taxable income but withdrawals are taxed but normally at a lower rate as your taxable income is usually lower in retirement.
Contributions to your 401k reduce your taxable income but withdrawals are taxed but normally at a lower rate as your taxable income is usually lower in retirement.
I would rather pay now then later. With the goverment wild spending taxes are not going to go down.
feederdriver06
former monkey slave
Good point and has crossed my mind many times. With this country being a shambles financially it is tempting to dump everything and bet on it being cheaper now rather than later.
Also, I will add for all of you ROTH fans, Just because a ROTH IRA's gains are tax free now doesn't mean the tax code won't be changed at some point in the future. America is broke and Uncle Sam will try to steal your money from you any way he can.
Highly unlikley. If they change the tax code on a Roth then the world will
likely come to an end. A National sales tax will be first. A Roth is still the
best plan 1st. 401k second
1989
Well-Known Member
Max out a Roth IRA out for you and your spouse before you think of putting anything in a 401 or buying UPS stock. I dont know how old you are but you rest assure Uncle Sam will take at least half of your 401 when you are of age to take it out. The growth on a Roth is tax free. It will be all your money. Invest in index funds and stay away from those stupid
stock broker who will want 2 percent going in and 2 percent going out.
Just my 2 cents for what its worth
Just remember the ROTH is for high income people. Most of us will not be in a higher tax bracket in retirement especially the way the whole pension thing is going. The money you lose now on OT is huge so you are better off not paying that tax now. I guess for married UPSERS with a huge nest egg a ROTH makes sense but I would bet most Teamsters will not make more money in retirement. There are calculators that will show you which is better depending on your projected retirement income.
1989
Well-Known Member
How are you losing money on overtime? At the end of the day (end of the year) you pay tax on your adjusted gross income. Overtime or not. So if you are married filing jointly. As long as you can can keep your AGI under $67,900 you stay in the 15% bracket.
There are alot of drivers making well over $80000 per year now because of all the OT so it will be hard for them to get down to $67,900 even while maxing out their 401k. Like I said most folks will not be making more money in retirement. Hell once you get around 10 hours of OT your take home is killed by taxes. The point is to pay tax later in retirement when you are living in a van down by the river.
UpstateNYUPSer(Ret)
Well-Known Member
There are alot of drivers making well over $80000 per year now because of all the OT so it will be hard for them to get down to $67,900 even while maxing out their 401k. Like I said most folks will not be making more money in retirement. Hell once you get around 10 hours of OT your take home is killed by taxes. The point is to pay tax later in retirement when you are living in a van down by the river.
1989 was talking about Adjusted Gross Income. A driver making $80K who is maxing out his 401K ($16K) would have an AGI of $64K before applying any additional deductions he may be entitled to.
I have also noticed that I lose money if I work more than 8 hours of OT in a given week.
dannyboy
From the promised LAND
had ups not gone public, ups stock would be the way to go. it grew every year as the company grew, there were stock splits on a regular basis, and the dividends were good as well. over all a solid investment that would be there when you retired.
401k is an interesting beast. yes, you can manage it yourself probably as well as most of the investment houses. but you can drop half of your investment pretty quick if not careful. but it also allows for quicker gains if invested wisely.
as to the roth
as for higher tax rates, they are a fact of life.
im waiting on them to start taxing your actual holdings instead of ust what you withdraw. in other words, your 401k has a half million in it. your tax on that investment will be say one or two percent if you dont withdraw any, and 30-40% of you do withdraw.
just wait, those scumbags got dollar fever, and none of the dollars they want belong to them.
d
401k is an interesting beast. yes, you can manage it yourself probably as well as most of the investment houses. but you can drop half of your investment pretty quick if not careful. but it also allows for quicker gains if invested wisely.
as to the roth
that statement is under current law. when our gooberment figures out they can rape you for that money, they will. remember, nothing is written in stone except death and taxes. the rest they can change at will.Also consider starting a Roth IRA with some mutual funds in it. I like this cause it isn't taxed when you take the money out!
as for higher tax rates, they are a fact of life.
im waiting on them to start taxing your actual holdings instead of ust what you withdraw. in other words, your 401k has a half million in it. your tax on that investment will be say one or two percent if you dont withdraw any, and 30-40% of you do withdraw.
just wait, those scumbags got dollar fever, and none of the dollars they want belong to them.
d
1989
Well-Known Member
There are alot of drivers making well over $80000 per year now because of all the OT so it will be hard for them to get down to $67,900 even while maxing out their 401k. Like I said most folks will not be making more money in retirement. Hell once you get around 10 hours of OT your take home is killed by taxes. The point is to pay tax later in retirement when you are living in a van down by the river.
AGI is your gross income minus all deductions (dependents, mortgage interest, R. E. taxes, 401K contributions, traditional IRA contributions, etc) One can easily have 25-35K in deductions without needing to contribute to a 401K. So I can make up to $95K and still bring my AGI below $67900. And I will get all that extra taxed overtime back because it will be taxed at 15%.
Now I am not saying one shouldn't save for retirement, but I do believe that a 401K should be your last vehicle to contribute to.
Do you believe the 10 and 15% tax brackets will be lower in retirement? I don't think it will be.
