WWYD- Husbands craptastic 401k plan - Early-Retirement.org

WWYD- Husbands craptastic 401k plan

Today, 04:19 PM	? #1
Recycles dryer sheets ? Join Date: Apr 2012 Location: San Diego Posts: 306	WWYD- Husbands craptastic 401k plan My husband works for a firm that is based in another state. He's the only employee in this state. They offer a 401k to employees who have been there a year. They offer a match of $1 for every $1 up to $1000/year. That all sounds good. Up till now, since he's worked for small firms, he's just been doing IRAs w/catchup... And I've born the brunt of the tax advantaged savings by maxing my 401k and catchup. The problem with the 401k he's being offered - it's 100% full of load funds. The loads vary from 5.75% (stock funds) to 3.75% (bond and/or money market funds.) I think the $1k/year match is still worth it... And if he participates in the 401k, he can't do the IRA. So I told him to do $6k /year into the 401k, and any money left over can go into taxable savings (same as before.) I suggested he put it in the bond fund - and I'll adjust my asset allocation to account for this 100% bond allocation on his side. I just can't see giving up 5.75 cents for every dollar to loads. It's bad enough giving up almost 3.75 cents/dollar. Should we have just stayed with IRA? FWIW - he's retiring in Jan 2014... so we only have to deal with this craptastic plan for 1 year. ' + '?' + google_ads[i].line2 + '?' + google_ads[i].line3 + '?' + '' + google_ads[i].visible_url + ' '; } } '' } if (google_ads[0].bidtype == "CPC") { /* insert this snippet for each ad call */ google_adnum = google_adnum + google_ads.length; } document.write(s); return; } google_ad_client = 'ca-pub-7757781251671730'; google_ad_channel = '3711355403'; google_ad_output = 'js'; google_max_num_ads = '6'; google_ad_type = 'text'; google_feedback = 'on'; // --> __________________
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Today, 04:25 PM	? #2
Moderator ? Join Date: Jan 2008 Location: Chicagoland! Posts: 8,241	My husband works for a firm that is based in another state. He's the only employee in this state. They offer a 401k to employees who have been there a year. They offer a match of $1 for every $1 up to $1000/year. That all sounds good. Up till now, since he's worked for small firms, he's just been doing IRAs w/catchup... And I've born the brunt of the tax advantaged savings by maxing my 401k and catchup. The problem with the 401k he's being offered - it's 100% full of load funds. The loads vary from 5.75% (stock funds) to 3.75% (bond and/or money market funds.) I think the $1k/year match is still worth it... And if he participates in the 401k, he can't do the IRA. So I told him to do $6k /year into the 401k, and any money left over can go into taxable savings (same as before.) I suggested he put it in the bond fund - and I'll adjust my asset allocation to account for this 100% bond allocation on his side. I just can't see giving up 5.75 cents for every dollar to loads. It's bad enough giving up almost 3.75 cents/dollar. Should we have just stayed with IRA? FWIW - he's retiring in Jan 2014... so we only have to deal with this craptastic plan for 1 year. Crapastic! What a great word. Very descriptive. Even though you are paying excessive fees, for the $1000 you put in you get an immediate additional $885 - the employer match minus all the fees. Grit your teeth and do it. When he leaves, roll it over into an IRA. ' + '?' + google_ads[i].line2 + '?' + google_ads[i].line3 + '?' + '' + google_ads[i].visible_url + ' '; } } '' } if (google_ads[0].bidtype == "CPC") { /* insert this snippet for each ad call */ google_adnum = google_adnum + google_ads.length; } document.write(s); return; } google_ad_client = 'ca-pub-7757781251671730'; google_ad_channel = '3568142076'; google_ad_output = 'js'; google_max_num_ads = '6'; google_ad_type = 'text'; google_feedback = 'on'; // --> __________________ It's not the cards you're dealt in life but what you do with them that matters
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Today, 04:36 PM	? #3
Recycles dryer sheets ? Join Date: Apr 2012 Location: San Diego Posts: 306	Actually our plan is to have him put $6000 in. That's what would go into an IRA. He isn't allowed to do both a traditional IRA and a 401k. His employer is relatively small - around 50 people. But they're all highly educated... you'd think they'd want to avoid the fees. Not sure if it's possible to get a no-load 401k plan set up for 50 employees or less. __________________
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Today, 05:42 PM	? #8
Recycles dryer sheets ? Join Date: Apr 2012 Location: San Diego Posts: 306	Hmm. I thought we were above the income caps for Roth. That turbo tax calculator suggests other wise. Off to go read some more. __________________
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