Originally Posted by DollahBillYall
1. I can't leverage/invest in other biz with it (loan cost is 8%, max 50K, double taxation)
2. I may be in a higher income bracket when I retire
3. I want to retire earlier than 60, as well as does my wife, or at least have the option to try to
4. have a burning desire to make more
*5. our accounts are serperated as well as our age
6. no liquidity, no liquidity
Just my opinions...........
1. The "real" cost of a 401k loan is the "oppourtunity cost". The loan proceeds come from selling assets in the plan, so if you take a loan from a stock allocation that goes up 12%.......the "cost" for your loan is 12%. I would only take a loan from the fixed income portion of my portfolio which earns ~5%. The 8% "interest " that you "pay to yourself" has no significance, as far as I am concerned. There are mixed opinions about the double taxation issue and I am in the camp that believes it is also insignificant. A 401k loan should usually be a last resort anyway, but I also see it as a means to xfer assets out of the 401k.
2. Being in a higher tax bracket is a good thing! Least of your worries....you could always employ some alternate strategies like muni funds, etc.
3. 401k lets you withdraw with no restrictions or penalties at age 55 or better if you terminate employment. You can also do a 72t SEP Plan at any age.
4. Don't get burned.....keep exploring your options
5. Study all the fine details of your plan.....read the prospectus. Find out if you can do in-service rollovers into a self-directed IRA. Seperate plans is probably better than a joint plan.
6. I saw your other post ref liquidity for real estate...........that seems to be a huge issue for you. That other post struck me as odd because real estate is the most frequently leveraged asset around. This IS retirement money. It would only make sense to use leverage for something that was a pretty sure bet. Thats why IRS won't let IRAs be used as collateral. Your best "leverage play is the 401k loan from the fixed income portion of your asset allocation.
If you are maxing out, why not cut back to whatever gives you the full company match (if you get one)........that's the bare minimum. The next level is the maximum contribution that won't drop you into a lower tax bracket. That could free up some funds for alternative investments. I think you will not find a better retirement vehicle than 401k, but thats not in any way to suggest you should only do 401k.
Good luck and stay patient!