My husband works for a firm that is based in another state. He's the only employee in this state.
They offer a 401k to employees who have been there a year.
They offer a match of $1 for every $1 up to $1000/year.
That all sounds good.
Up till now, since he's worked for small firms, he's just been doing IRAs w/catchup... And I've born the brunt of the tax advantaged savings by maxing my 401k and catchup.
The problem with the 401k he's being offered - it's 100% full of load funds.
The loads vary from 5.75% (stock funds) to 3.75% (bond and/or money market funds.)
I think the $1k/year match is still worth it... And if he participates in the 401k, he can't do the IRA. So I told him to do $6k /year into the 401k, and any money left over can go into taxable savings (same as before.)
I suggested he put it in the bond fund - and I'll adjust my asset allocation to account for this 100% bond allocation on his side. I just can't see giving up 5.75 cents for every dollar to loads. It's bad enough giving up almost 3.75 cents/dollar.
Should we have just stayed with IRA?
FWIW - he's retiring in Jan 2014... so we only have to deal with this craptastic plan for 1 year.
They offer a 401k to employees who have been there a year.
They offer a match of $1 for every $1 up to $1000/year.
That all sounds good.
Up till now, since he's worked for small firms, he's just been doing IRAs w/catchup... And I've born the brunt of the tax advantaged savings by maxing my 401k and catchup.
The problem with the 401k he's being offered - it's 100% full of load funds.
The loads vary from 5.75% (stock funds) to 3.75% (bond and/or money market funds.)
I think the $1k/year match is still worth it... And if he participates in the 401k, he can't do the IRA. So I told him to do $6k /year into the 401k, and any money left over can go into taxable savings (same as before.)
I suggested he put it in the bond fund - and I'll adjust my asset allocation to account for this 100% bond allocation on his side. I just can't see giving up 5.75 cents for every dollar to loads. It's bad enough giving up almost 3.75 cents/dollar.
Should we have just stayed with IRA?
FWIW - he's retiring in Jan 2014... so we only have to deal with this craptastic plan for 1 year.