for those still wo*king, are you still putting $ in your 401K?

[Koolau]

Hopeful,

Not really a suggestion, but something to think about: The Coming Generational Storm by Scott Burns and Laurence Koltikoff (SP?) suggest at least considering the following:

DO put in enough to get your 401k match.

Then, you need to think about the effects that your eventual withdrawals will have on your tax situation. We don't know what future tax rates will be, but, Obama's promises aside, Burns/Koltikoff make a convincing argument that future tax RATES must go up to cover the roughly $60 trillion in unfunded but promised SS and Medicare/Medicade.

Also, since SS is currently partially taxed (for some) and the taxation is based on total income, and the limits are not indexed, it is likely that most of us will eventually be fully (well at least 85%) taxed on SS. My point, it's not a slam dunk to take tax deferral. It's one of the great "unknowables" of our time, but my bet is that tax rates will only go up in the future. I'm guessing it's better to pay the taxes now.

If I had it to do over (FIRE'd in '05). I'd skip anything past the employer match in a 401k and go with a fully taxable account. (I'm just assuming you're already doing your Roth to the max.) As it is, I'm currently "Rothising" as much of my traditional IRA's and 401k as I can and keep myself in the 25% tax bracket. I'm also holding off on SS (at this time) in order to "Rothize" as much deferred money as possible before my income "leaps" with the advent of SS.

YMMV, so talk to someone who knows more about this than I do. But YOU will have to make the "guess" on whether you think tax rates will increase.

Honestly, I hope I turn out to be wrong on this!! But, read the book. Scary, but well researched stuff. I think this is probably going to bite us big time. Especially you younger folks!!

 

[Westernskies]

maxed out plus the 50+ catch-up contribution. I take $0 salary every January until I reach the maximum,instead of making smaller incremental contributions every two weeks. Been doing it for 5+years; this is probably the only year my strategy backfired.

 

[Sandman]

Ditto. Still maxing out (401K) plus over 50 catch-up contributions. As a believer in the power of dollar cost averaging; this is a great time to buy.

 

[siamamerican]

Maxing out this year and next. With the employor match and tax saving I could lose 60% and breakeven. Seems like a no brainer for my situation.

 

[novaman]

Maxing out both my wife and myself. While at this point the strategies of an aggressive portfolio , buy and hold, and DCA have failed for me, what else is there for me to do??

 

[JustCurious]

I am working, but my company does not offer a 401k.

 

[Urchina]

Maxing out 401(k) and IRAs, here. Why on earth would I pass up a 45% discount on stocks?

DH's company just announced some very good news, so things look stable there, but we're also really working on getting our e-fund to 6 months. After we reach that goal we'll be dumping money into a taxable account and paying off our HELOC.

 

[FUEGO]

Reminder for those looking to max out their 401k's in 2009 - the limit has increased $1000 to $16,500. The catch up contribution is $5,500 for 2009. Those turning 50 or older during 2009 can contribute a total of $22,000.

 

[tmm99]

Maxing out.

tmm

 

[ikubak]

Maxing out. Nothing has changed in terms of long-term planning.

 

[redduck]

I started late in the savings-for-retirement game. But, once I started, I have always maxed out and will continue to do so. However, I'm being quite cautious in actually buying or adding any equities within the retirement account.

 

[laurence]

DCA. I've gone from 6k annual rate to 11k, the employer puts in 4k matching. Max my IRA and DW's SEP IRA. But we've focused more on paying off debt this past year, with about 30k going on the 2nd to pay it off.

 

[Frugality_of_Apathy]

As of Monday I went from 0% contribution to 10% contribution. I still think fundamentally our economy is flawed but it's fallen to at least a reasonable level. I was telling my boss last year when I stopped contributing to the 401K and the housing thing was just coming to light, that in the absence of another bubble the market should only legitimately be around 8000. Now that we're down here I don't mind tossing some more money in.

 

[Kronk]

Next month I'll max out at $30,500 for the year -- $15,500 personal plus 25% for my S-Corp's individual 401k. Presuming my job status doesn't change, I'll be at $34,500 in 2009.

Of course, I've lost around $8,000 or so of the $28,000 I put into it this year...

 

[DblDoc]

Maxing out - and working a second j*b which goes into a taxable account monthly. If I'd sat down to script it I couldn't have come up with a better scenario. Started late but am at my peak earning years, stocks on sale, recession proof job and only debt is a mortgage at 5%. Even if this lasts > 10 years, which is my anticipated FIRE date, I would just have to work an extra year or two - and that is based on estimated returns that were conservative with a DOW at 14000...

Like Kronk I'm way underwater on this years contributions but my average cost per share keeps declining and I've TLH'd alot along the way.

DD

 

[Lusitan]

I'm still maxing out my 401(k) and plan to max out our IRAs this year as well.

Only change I made is that I switched all new contributions to 100% equities to help keep our desired asset allocation in line. The Target Fund that makes up the core of our retirement portfolio thankfully has done the lion's share of the rebalancing automatically; I don't think I would have had the guts to keep up the rebalancing on my own over the past few months. But I'm OK with throwing my bi-weekly 401(k) contributions into the big money pit that is the stock market these days.

Just saw that the S&P 500 is right about back where it was when I graduated college and started working ... sort of like time travel (except with a wife and a kid and a mortgage and ...)

 

[Bimmerbill]

A 1.5 months ago I reduced my 401K (TSP) from 18% to 5%. I decided to do the Dave Ramsey thing and pay off as many of my debts as I could. The 5% covers my employer match. I couldn't not contribute and it hurt me to cut back.

But, I've been making headway paying off my stupid consumer debt (mostly cars) and this seasons heating oil hose job.

I'd love to ramp back up to 18%, but don't see that happening soon. Yearly raise in JAN should help my 5% be worth more.

 

[laurence]

Is that your shadowbox? Nice.

It's occurred to me that over the last six months I've raised my 401k contribution from 6% to 11%, and over the last year the stock indexes have come down close to half. The good news is I'm now buying almost 4 times as many shares on payday as I was a year ago, talk about ramping up accumulation!

 

[Bimmerbill]

Thanks, they did a nice job on my shadowbox when I retired. I like it, just need a place to hang it up since I repainted my living room.

Maybe I'll go back to upping my contribution by %1 each JAN when I get my raise/COLA. Still waiting to see how much of my own money I'll need to spend on my daughters therapy. Well, realistically spend. In actuality, it appears I can spend upwards of 125% of my yearly salary, but thats just not possible.

 

[FIYes]

Still contributing and occasionally making the mistake of looking the balance. It is like driving by a car wreck---you know you don't want to see it, but look anyway.

 

[FinanceDude]

Thanks, they did a nice job on my shadowbox when I retired. I like it, just need a place to hang it up since I repainted my living room.

Maybe I'll go back to upping my contribution by %1 each JAN when I get my raise/COLA. Still waiting to see how much of my own money I'll need to spend on my daughters therapy. Well, realistically spend. In actuality, it appears I can spend upwards of 125% of my yearly salary, but thats just not possible.

I like the 1% rule,I have used it with success to get my younger clients to contribute more to their 401Ks and 403Bs..........

 

[ziggy29]

I cranked up from 8% to 14% of my pay when the market really began to tank, figuring I wanted to load up on cheaper shares to ease the pain of seeing my existing balance go down the toilet.

Like others, though, I'm not plowing all of my cash flow into cheaper stocks now; I'm also stockpiling cash until my wife finds a job. We have a rather large emergency fund now, and will continue to do so as long as my paycheck is a single point of failure. When she finds a job, assuming I still have mine we plan to stimulate the economy with a few things and home projects we've been pushing off for the last few months.

 

[Salaryman]

Max out in 08.
Will max out again in 09.

 

[chinaco]

Maxed it out. all of it is going into a stock mutual fund.

 

[FUEGO]

Just upped the withholding percentage a couple percent to max it out for 2009. Will also max out 2008 contribs by year-end.