Which is better paying $25 month more in taxes or to put same funds in 401K?
By sedel1027
@sedel1027 (17846)
Cupertino, California
March 4, 2007 11:38pm CST
I have looked at both side of this. My husband and I currently have no retirement fund set up. With making the money we do, we do need every cent we make most months. Regardless, when my husband was single he acquired this habit of paying additional money to federal and state takes every pay check to ensure he did not owe at the need of the year. With being married, we have a lot more deductions and I feel it is not necessary for him to put out the extra money every month. The company he is with now offers a 401K (don't know much abut it, he is getting the info on Monday). Would it be better for us to invest in the 401K, even if it is just $50/month?
2 people like this
6 responses
@melanie652 (2524)
• United States
14 Mar 07
Invest in the 401k. You can never go wrong investing in yourself and in your future. Even $50 a month will go a long way over the years towards your retirement. The money can be put in the 401k pre-tax. Meaning no taxes are taken out on it and it actually lowers his taxable income per paycheck. When he retires he'll have to pay taxes on it then, but that's not a big deal. I say go for the 401k. You should pay yourself first anyway - not the government!
2 people like this
@sylvrrain (659)
• United States
12 Mar 07
Yes, save that money for yourself.
In fact, if you put your money into an IRA, you can even write that off as a deduction.
Many companies that offer a 401K plan, will match contributions to a certain amount. How nice is that.
Definately save that money. The IRS does not care that it has to send you a refund or cash a small check, as long as your taxes are filed and all your taxes are paid.
So, save, and take the deductions and credits you can qualify for saving towards your retirement.
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@Lauraleigh99 (4718)
• United States
5 Mar 07
Yes the sooner you have a head start on a retirement plan the better. Those years will go quick and then you will be looking back wishing yoou would have started sooner.
1 person likes this
@sedel1027 (17846)
• Cupertino, California
5 Mar 07
I definitely agree with that. We are watching my Mother-in-law and her husband go through this. They had only a few hundred saved and they are both in their early fifties. They had to seriously downsize in order to save money. Even with downsizing they are not really able to save what they should. I am 28 and worried about this (I was brought up to actually start saving for retirement at 25), I cannot imagine going through this at 50.
2 people like this
@claudia413 (4280)
• United States
14 Mar 07
You've gotten the right information here. Definitely invest it in your future. I work for a financial planner, and we have many younger folks who are already preparing for their retirement. They're lucky in that they will be able to retire earlier than those who have no money saved for retirement. The sooner you start saving, the sooner you can afford to retire...it's that simple. You can start with a set amount per month, then raise it when you're able. It does add up nicely.
1 person likes this
@resa77 (51)
• United States
6 May 07
I would definitely say to put this in your 401k! Most companies that offer 401k also offer some sort of match, so not doing it is like passing up free money! I don't put a lot in my 401k - about $20 a paycheck, but between my contributions and the work place matching, I have over $1800 from my $600 investment just since last July and had I not went this route, Uncle Sam would have just eaten that money up anyway.
I see this topic is quite old. What did you decide to do?
