Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 05-21-2011, 11:36 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 8,952
My spouse's plan is worse, but she contributes the maximum possible as always.

The tax-deferred investments are the way to go until the fees are above 3% or so. You also have to look to the future when you rollover the assets into a low-cost plan. If you don't have the assets you will not have that low-cost tax-advantaged space in the future.

Another trick that my spouse uses is to borrow the maximum possible from her 401(k) and put the money in a low-expense-ratio 529 plan instead. She can be in the same investment category, but pay 2% less in fees AND the gains are tax-free instead of merely tax-deferred. She likes the way she stiffs the 401(k) provider out of the 2% in fees they would normally get. This also keeps her tax-advantaged 'space' open for the future when she repays the loan.

LOL! is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-22-2011, 10:08 PM   #22
Thinks s/he gets paid by the post
MooreBonds's Avatar
Join Date: Aug 2004
Location: St. Louis
Posts: 2,125
Originally Posted by growing_older View Post
I have been employed by companies which offered only poor choices in the 401k plan. If there isn't even a single reasonable low cost fund that I would want, it can still sometimes be advantageous to pick the least worst of the available choices, get the tax deduction, get a match if there is one, and plan to roll it over to an IRA when you leave the company. If you don't stay too many years, the deduction alone can still be worth putting up with a mediocre fund for a while.
I second this sentiment - the choices in my fund aren't stellar (though aren't quite as bad as 1.5%-1.71% expense ratios)....but I still max out between the 401k and 401kROTH, with the present benefit of some taxable income lowering, and that I'll be able to roll them into better choices 10 years from now when ERing...

Dryer sheets Schmyer sheets
MooreBonds is offline   Reply With Quote
Old 05-23-2011, 07:45 AM   #23
Recycles dryer sheets
Join Date: May 2010
Location: SW Ohio
Posts: 360
I would sign up because of the tax savings. Nothing is better than getting 100% of your earned income to start working for you, even if the cons are a crappy plan. Usually for every $100 you put in, your take home pay only goes down about $75. Pick the least overpriced fund/option to use. I usually pick a 'stable' type.

Sometimes the 401k/403b will let you rollover once a year to an IRA without termination. This can be a work around.
jayc is offline   Reply With Quote
Old 06-01-2011, 07:44 PM   #24
Recycles dryer sheets
Cassius King's Avatar
Join Date: May 2010
Location: Cincinnati
Posts: 194
Originally Posted by jayc View Post
Sometimes the 401k/403b will let you rollover once a year to an IRA without termination. This can be a work around.
I learn something new everyday.
Cassius King is offline   Reply With Quote
Old 06-01-2011, 08:03 PM   #25
Recycles dryer sheets
Join Date: May 2007
Posts: 213
Originally Posted by intent View Post
He sounds crazy, but I think the 401k guy who my DW met with recently is even crazier.

My wife tells him we want to retire as early as possible. He says something along the lines of, "It really isn't possible to retire prior to age 59, so that's what I'll calculate for." He then begins to gather our financial info and upon doing so praises her for being well ahead of most. At the end of the meeting, he suggests to her that we are easily on track and, in fact, he would recommend we *spend more* and have some fun.

So, in his professional opinion, a couple who wants to retire as early as possible should keep the nose to the grindstone until 59, but be sure and spend more of what they make along the way.

To be fair, the guy she met with could only allot 30 minutes for each employee, so the meeting was hurried - but that is C-R-A-Z-Y.
we once had an adviser from DH's company tell us that. When actually saw him after the recent mortage/market meltdown/mess he was quite sheepish. If we hadn't saved more than we should have we would have been very nervous early retirees.
52andout is offline   Reply With Quote
Old 06-01-2011, 09:08 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
Join Date: Aug 2006
Posts: 12,483
Originally Posted by Webzter View Post
I believe FinanceDude is in your area.... bonus points, if he has anything mockable, you have ammo for the forum.

I don't know if he's fee-based and/or too expensive for the likes of you or me, but might be a place to start
I'd review his plan for free, and give him objective advice. He can PM me or email.........
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 06-08-2011, 07:02 PM   #27
Recycles dryer sheets
Join Date: Nov 2007
Posts: 103
Originally Posted by Coderguy View Post
Just had the 401k meeting at my new job.

He said, and I quote: "We don't believe in index funds, they are the only way to guarantee you under perform the market".

The fees on the plans are 15.00 quarterly, 25.00 annually plus a range of 1.10% to 1.71% fees&charges.

I am not participating in the plan.

Max individual IRAs first, $5000/year, and $5000 for your spouse (if you are married) in a low cost mutual fund company like Vanguard or T-Rowe, then go to these maxing them to the limit. Sure, 1.1-1.7% management fees are horrible, but even those aren't high enough to justify using a taxable, but low-cost investment as an alternative.

If they were matching, I'd say get the match first, but you already said they are not.

If you're married, have your spouse start a business of some kind, then open up a SEP and invest crazy amounts in that in a low-cost investment as opposed to your employer plan.

slazenger is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Am I crazy to consider paying advisor fees? Earl E Retyre FIRE and Money 85 08-29-2010 05:44 AM
Tell me if I'm crazy lightspeed Hi, I am... 17 05-25-2007 08:35 AM
Am I crazy? kubikiri Young Dreamers 13 04-18-2007 04:38 PM
Ok now who is the crazy one? newguy88 Other topics 17 01-22-2007 02:14 PM
Retire at 45? Crazy or Just Maybe Possible? KimInWis Young Dreamers 17 01-02-2007 02:07 PM


All times are GMT -6. The time now is 10:09 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.