Re: 401K (sent from Eudora previously)

[http://dummy.us.eu.org/robert (Robert)]

I guess you already know that you can contribute $16500 + $5000 = $21500
to your 401K, right?

Also, you should consider an IRA in addition.  That may be a good way to
save on taxes until you go back into the lower tax bracket.  (Max
contribution is $6000 at your age.)

I was also reading that Health Savings Account can be a good way to defer
tax.  I don't know if you have that as an available option.  If you
already get good (less than a deductible of $2400/year), then it may not
be worth it.

Paying off your mortgage may be a good way to save on interest payments.
You'd have to do some calculations to see whether it's worth it vs.
mortgage interest tax deduction.

Investing in Ma municipal bonds may also be something to
consider because, I think, some part of them (interest, maybe?) may be
deductible on the Ma part of your tax return.

 > From: http://dummy.us.eu.org/robert (Robert)
 > Date: Wed, 27 Apr 2011 20:11:51 -0700
 >
 >  > From: http://dummy.us.eu.org/robert (Robert)
 >  > Date: Wed, 27 Apr 2011 12:32:26 -0700
 >  >
 >  >  > From: "http://www.juno.com/~w1few"; <http://www.juno.com/~w1few>
 >  >  > Date: Wed, 27 Apr 2011 18:16:57 GMT
 >  >  >
 >  >  > If you already got this, ignore this one.  Thanks.
 >  > 
 >  > Nope, only got this one.
 >  > 
 >  >  > I am enrolled in a 401K at work.  They are initially deducting 3% with a 2%
 >  >  > matching from the boss.
 >  >  > Questions:
 >  >  > 1 How much should I contribute (max is 92%)  (matching is up to 4%)
 >  > 
 >  > I think you should figure out how much you were intending to take out from
 >  > AIG and probably contribute around the same amount.  Does that seem
 >  > logical/rational?
 >  > 
 >  >  > 2. Roth IRA vs traditional IRA (ROTH takes taxes now vs later)
 >  > 
 >  > You mean Roth 401k vs. traditional 401k?  You'll probably be in a higher
 >  > tax bracket right now and a lower one later.  So, it seems like doing a
 >  > Roth one would make more sense.
 > 
 > Sorry for misinforming you -- you're right a traditional IRA makes more
 > sense now in this case to pay lower taxes now.
 > 
 >  > I personally do both, to hedge against both possibilities.  Maybe doing
 >  > both for you would make sense, but with more going towards the Roth side
 >  > of the equation...
 >  > 
 >  >  > 3. The investment choices are stocks , bonds, or mix  (I will go with foreign
 >  >  > bonds if possible and US Bonds)
 >  > 
 >  > Yeah, I think the bond concept is good.  Do you get a money market fund,
 >  > too?  If so, what's its return?  If it's equal or better than the AIG
 >  > return, then I'd also put some in there, too.
 > 
 > Given that you'll be getting more than you'll need to live on from the
 > annuity, the aggressive fund makes most sense since you have a cushion for
 > the next 5 years.
 > 
 > But, of course, you should remember to move into a less aggressive fund
 > after 5 years.
 > 
 >  >  > Thanks much for your help,
 >  >  > D