1. Saturday, July 10, 2010 - 9:59 AM
I suppose IRA CD's could fall into his tips category. However, I don't think you can make weekly contributions to an IRA CD, like you could with an IRA of stocks, bonds, or funds. Am I right about that, Ken?
Also, while I have a small 401k plan, I'm really not sure I believe it will prove to be an advantage (though I still participate). Here are some of my reasons for questioning it:
1. I'm purchasing mutual funds at the discretion of the 401k management. They take a %age fee, and each fund takes a %fee. I'm buying whenever they "group" buy, so I could be buying at the HIGH every week... I have no control over that. And if the market actually does tank, down to 8000, 5000, or 1000, the 401k, will turn out to have been a very, very, very, unwise choice.
2. Taxes. If taxes in the future rise significantly, I would have been better off paying taxes all along. By defering taxes til a time when they are higher...I lose. I would have saved money paying taxes under the bush tax cuts, verses waiting for a time when taxes are astronomical (as some predict they will be).
3. Cash in the bank. It's insured. It grows. I pay tax on the interest. When I take money out, for whatever reason, no penalty (wait til CD matures, if not a savings account), no "after/withdrawal" taxes...every penny is mine to use.
Any thoughts?
Also, while I have a small 401k plan, I'm really not sure I believe it will prove to be an advantage (though I still participate). Here are some of my reasons for questioning it:
1. I'm purchasing mutual funds at the discretion of the 401k management. They take a %age fee, and each fund takes a %fee. I'm buying whenever they "group" buy, so I could be buying at the HIGH every week... I have no control over that. And if the market actually does tank, down to 8000, 5000, or 1000, the 401k, will turn out to have been a very, very, very, unwise choice.
2. Taxes. If taxes in the future rise significantly, I would have been better off paying taxes all along. By defering taxes til a time when they are higher...I lose. I would have saved money paying taxes under the bush tax cuts, verses waiting for a time when taxes are astronomical (as some predict they will be).
3. Cash in the bank. It's insured. It grows. I pay tax on the interest. When I take money out, for whatever reason, no penalty (wait til CD matures, if not a savings account), no "after/withdrawal" taxes...every penny is mine to use.
Any thoughts?
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