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Discussion Starter #1
Alright I know this subject has been beat to death, but I would like some honest thoughts.

I just started a job with a large corp and plan on staying there awhile. They offer a 401k, but no match. Would I be better off starting a Roth on my own?
 

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Point being, you're going to pay the taxes on the money one day. Is your income bracket and tax rate going to go down when you make withdraws at retirement age?
 

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rodent aviator
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With the 401K you don't pay taxes until it's withdrawn, and you pay taxes on everything including what you earned in interest over the years. With the Roth, you pay taxes on the money before putting it in the account and then that's it. Everything it earns in interest is tax free, you don't pay taxes again when you withdraw it. The biggest factor is what tax bracket you're in now. One benefit of deferring the taxes is that you may be in a much lower tax bracket when you retire.
 

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Discussion Starter #6
Reason I'm not sure about the 401k, is it is uncertain what the tax rate would be when it comes time to retire.
 

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401k - you don't pay taxes upon deduction & its tax deferred.....NO BRAINER!

Your welcome.
Really? How old are you MoparRacer89? Will you be close to the 2013 federal maximum contribution ($17,500)? If you are younger, some Roth is definitely worth it. Since there is no tax liability at withdrawal, you can take out large sums of money without tax liability. Do taxes generally go up or down? Will taxes be less when you retire? I believe there are also benefits to Roths in estate planning. If you're older, it's probably better to put it in the regular 401k since Roth won't grow much if you're retiring soon.
 

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Put in 401k to take advantage of employer matctching.

My employer matches 60% if I contribute 11%
With earnings like they are right now I'm all in on the 401k
 

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The biggest advantage is for you to be using untaxed money (larger quantity) to build larger savings.

Do everything you can to get company match first, thats free money coming your way. Fantastic for your money to be gaining tax free, do that TOO!

Chris
 

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FYI any company matching has to go into the traditional 401K. I contribute my percentage to the Roth and employer match goes into the traditional 401k.
 

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I'm 22, I put 5% in my 401k company matches 4% then I put 4% in a ROTH 401. I hope it pays off in 40 years :p
 

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Do both, they both have their own advantages. 401k, even though there is no employer match will allow tax deferred contributions. Your contributions are taken from your check PRE TAX. This will allow you to contribute more, without feeling the pain of after tax contributions.
I started a 401k at my job when I was 24 also, I am now 39. I have close to 400k in mine, I max it out every year $17,500 paid by the end of april.
Then I pay into my ROTH, 10 % of my pay. This contribution is taken AFTER TAXES, BUT when I withdraw , my money is TAX FREE !
Do both, struggle while you are young! I have never heard anyone ever say " Shit, I saved too much money ! ".
 

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I do get a match, I also found that at a 6% contribution to the 401 I offset my gross to the point it was even on my net pay.
 
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