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Reply to "Pull back on 401k contributions or take student loans"
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[quote=Anonymous][quote=Anonymous]I was in a similar situation & one consideration is that if you pull back on 401k contributions, your taxes go up, so you are not keeping the full amount. I went from putting the max into 401k ($25kish since I am 50) to just enough to get the full match from my work (around $8000), and between DC & feds my tax withholding went up by $550/mo. The withholding schedules seem to be pretty screwed up/in flux since the 2018 tax reform so I am not sure how this will shake out in the end, but the tax sheltering properties of the 401k are an additional consideration when running the numbers.[/quote] Not to mention, if the OP is young enough, cutting back on 401k has compounding effects. Let's say she cuts back and shaves that 10k off. At a modest 8% annual growth, after 10 years ahe has lost out on 11k in growth, so that 10k has cost her 21k. That 10k shaves a year or more off retirement, depending on OPs age. [/quote]
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