Whats the difference between contributing pre-tax and after tax. What's better to do? I don't remember what i did in my last job. TIA!
sarahthegreat
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Re: 401K question
mine is pre-tax. i don't know if its better, but i don't even notice the $$ missing from my check.
jenny2penny
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tracyg
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Re: 401K question
whats a good % to put away, so I don't notice TOO much missing, but am still saving a decent amount.
TwoBugs
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Re: 401K question
I'm putting in 7.5%. The lowest possible percentage was 5% but that definitely didn't seem like enough. Our company matches at 10% so eventually I'd like to do that, but it's too much for me right now.
meghanmetz
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Re: 401K question
Posted by tracyg
whats a good % to put away, so I don't notice TOO much missing, but am still saving a decent amount.
It all depends on your salary and what your long term goals are. Pre-tax is definitely the better way to go.
I currently save 20% because I want to max-out the pre-tax contribution threshhold ($14K in 2005).
If you want to save 10%, your take home pay won't be reduced by 10%, but probably by 7-8% because of lower taxable income).
steph4777
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Re: 401K question
Posted by tracyg
whats a good % to put away, so I don't notice TOO much missing, but am still saving a decent amount.
That's a personal decision, based on what you can afford. Another thing to consider is if your company matches your contributions. So if they match up to 5% of your contributions than I would consider putting 5%.
tracyg
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Re: 401K question
Thanks! I decided to contribute the % they will match.
soon2bMrs
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Re: 401K question
My advice would be to make the most of your company's match. If your company matches up to say 6% then I wouldn't contribute anyless because then you would be throwing away free money. I also agree with the other posters about contributing pre-tax.
