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Reply to "Why max out 401k?"
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[quote=Anonymous][quote=Anonymous]Because you aren’t taxed on it!! [/quote] This. Here's how I look at it: - If you need to money to live (not go on vacation, or buy things, but provide food, clothing, shelter, or transportation), then use income now and don't save. - If you don't need it for those reasons, save in a tax advantaged vehicle to the maximum extent possible. In the case of a T401k, right off the bat you are deferring paying taxes at the highest rate you have now. There are very few circumstances where that doesn't make sense. - Only in special circumstances (tax rates in retirement will be higher than they are now, concern about RMDs, etc.) should you divert that tax advantaged savings to taxable savings. [/quote]
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