http://www.myretirementblog.com/dont-invest-in-your-employer.html Retire happy, healthy and wise. Fri, 12 Mar 2010 05:17:26 -0600 http://wordpress.org/?v=2.9.2 hourly 1 http://www.myretirementblog.com/dont-invest-in-your-employer.html/comment-page-1#comment-65817 Arthur Sun, 28 Jun 2009 19:11:36 +0000 http://www.myretirementblog.com/dont-invest-in-your-employer.html#comment-65817 Though, I respect the author's opinion, I do not concur with his views for a couple of reasons. First, the company match that you receive on you 401k (typically 6-8% up to a specified amount) is a huge incentive. Second, the tax benefits are pretty impressive as well. For instance, assuming someone makes 100k and they invest 16.5k (the max allowed per year), then their taxable income would be only 83.5k. Given that they have been taxed at the 100k salary throughout the year, it is reasonable to assume that the refund would be greater due to the lowered income (from investing). Next, given that most 401k are pre-tax (expect for the Roth 401k), you money can earn interest a lot faster. Investing $400/mth and then increasing your contribution to $800/mth will change your monthly net pay about $50. These are just a few of several reasons why investing in your companies 401k is not only a good idea, but essential for the average person to build long term wealth. Though, I respect the author’s opinion, I do not concur with his views for a couple of reasons. First, the company match that you receive on you 401k (typically 6-8% up to a specified amount) is a huge incentive. Second, the tax benefits are pretty impressive as well. For instance, assuming someone makes 100k and they invest 16.5k (the max allowed per year), then their taxable income would be only 83.5k. Given that they have been taxed at the 100k salary throughout the year, it is reasonable to assume that the refund would be greater due to the lowered income (from investing). Next, given that most 401k are pre-tax (expect for the Roth 401k), you money can earn interest a lot faster. Investing $400/mth and then increasing your contribution to $800/mth will change your monthly net pay about $50. These are just a few of several reasons why investing in your companies 401k is not only a good idea, but essential for the average person to build long term wealth.

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