suze orman. she’s not my girl, but she’s recognized and does give financial advise. better than cramer, i think. i did notice that she glossed over why she says you shouldn’t put more into the 401 than your emp contributes, but she does elaborate on why you should never borrow against it. it bothers me a little, maybe i’ll look deeper into it, but for now, suffice to say that she does know a bit more about this stuff than i do and she agrees with my opinion (max emp contribution and that’s it). if you would elaborate on why you think you should go above and beyond, this is the perfect time and the perfect thread to do it in.
Simple answer : It increases your net worth.
Once you have contributed to 401k to the match, and also contributed to the Roth IRA and paid off bad debt (credit card, excessive rate HELOCs, etc) if you have money left over, you can reduce your current tax burden by additional contributions to your 401K. It’s an instant 34.3% savings if you are in the marginal Fed=25% and state =9.3% brackets.
This assumes you have suitable choices in your 401k.
I’m thinking she was emphasizing that it’s better to put money into a ROTH IRA before contributing above the employer match in a 401k.
Besides, when you leave your job you can roll the 401k into an IRA and then take a year off scouting retirement villages in Singapore and roll the whole the thing into a Roth IRA at the lowest possible tax bracket.
