Lisa99
Thinks s/he gets paid by the post
- Joined
- Aug 5, 2010
- Messages
- 1,440
I've searched and not found a similar thread so hope this isn't a question asked often.
If you were to do over the percentage of investements you put into a qualified plan (i.e., 401k or other) vs unqualified would you change your decision based on what you know in retirement today?
Reason for my question:
DH and I max out our 401k every year and put money into Vanguard index funds. Our split right now between qualified and unqualified is about 50/50.
I learned today that capital gains and dividends are taxed at 0 up to the 15% bracket. With that information, is it better to fund 401k to the matching and then put everything else in unqualified? We have no debt other than mortgage (which we don't want to pay down yet) and we have a 6-month cash cushion so any money deferred from 401k would go to Vanguard.
Our effective tax rate is 28% today and we can 'afford' the extra taxes we'd have to pay today by not having the bigger 401k deduction.
If you were to do over the percentage of investements you put into a qualified plan (i.e., 401k or other) vs unqualified would you change your decision based on what you know in retirement today?
Reason for my question:
DH and I max out our 401k every year and put money into Vanguard index funds. Our split right now between qualified and unqualified is about 50/50.
I learned today that capital gains and dividends are taxed at 0 up to the 15% bracket. With that information, is it better to fund 401k to the matching and then put everything else in unqualified? We have no debt other than mortgage (which we don't want to pay down yet) and we have a 6-month cash cushion so any money deferred from 401k would go to Vanguard.
Our effective tax rate is 28% today and we can 'afford' the extra taxes we'd have to pay today by not having the bigger 401k deduction.