Need advice on where to invest for retirement

Your second option is your best option: Put 6% into your employer's 401(k) to pick up the full match, then put the remaining 4% in a Roth IRA at an ultra-low cost discount brokerage such as Vangard, Fidelity, or, Schwab.

Is there a scenario where a roth doesn't make sense after the employer price match? (sorry for the thread hijack)

Quote from omghaxcode : Is there a scenario where a roth doesn't make sense after the employer price match? (sorry for the thread hijack)

The primary reason for investing in a Roth account is to take advantage of not having to pay taxes later. If you don't think taxes will be higher when you start to withdraw money or you don't think you'd be in a higher tax bracket, then Roth accounts are less appealing.

everyone's situation is different. you have not supplied enough information for anyone to give a reasonable guess as to which direction to take. the best someone could do for you is to tell you the advantages of each and how it may apply to a specific scenario.

Quote from Brian1 : Your second option is your best option: Put 6% into your employer's 401(k) to pick up the full match, then put the remaining 4% in a Roth IRA at an ultra-low cost discount brokerage such as Vangard, Fidelity, or, Schwab.

This.

How can anyone give an accurate answer without knowing his tax bracket?

No way I'd take advice from you guys.

Quote from saladdin : How can anyone give an accurate answer without knowing his tax bracket? No way I'd take advice from you guys.

If I'm at 28% tax bracket, single no dependents, how does that effect my contributions?

Quote from slickpost : If I'm at 28% tax bracket, single no dependents, how does that effect my contributions?

You pay taxes on a roth or traditional, it's just a matter of when. If I was in the 28 bracket and expected to be in a lower bracket when I retire then I would do a traditional. You get the tax deduction now, then when you pull it out at retirement you would pay the tax in your new lower retirement tax bracket (not current 28). If I expected to be in a higher tax bracket when I retired, I would do a ROTH. Pay taxes at the 28 rate and in retirement you can pull it out and not have to pay it on your new higher bracket.

With traditional IRAs, you avoid taxes when you put the money in. With Roth IRAs, you avoid taxes when you take it out in retirement.

It depends on tax brackets. 99% of people will be in a lower bracket when they retire because, well, you're not working any more. It's damn hard to retire with so much money you will gain tax brackets. I know I won't. So I'll take my deduction now and when I retire in the 15% bracket, pay taxes on it then (instead of current 25).

Quote from saladdin : It depends on tax brackets. 99% of people will be in a lower bracket when they retire because, well, you're not working any more. It's damn hard to retire with so much money you will gain tax brackets. I know I won't. So I'll take my deduction now and when I retire in the 15% bracket, pay taxes on it then (instead of current 25).

Assuming tax brackets won't change....I can all but guarantee that they will.

Invest in depends, you will need them.

Quote from saladdin : It depends on tax brackets. 99% of people will be in a lower bracket when they retire because, well, you're not working any more. It's damn hard to retire with so much money you will gain tax brackets. I know I won't. So I'll take my deduction now and when I retire in the 15% bracket, pay taxes on it then (instead of current 25).

People typically have fewer deductions at retirement (no mortgage interest, no dependents, no business related deductions, etc.). In addition, some people expect taxes to go up no matter what bracket you're in.

This explains it in more detail:
Will I be in a lower tax bracket when I retire? [the-adviser.com]

Quote from omghaxcode : Is there a scenario where a roth doesn't make sense after the employer price match? (sorry for the thread hijack)

Not to continue the threadjack but I'm in a scenario where I think it makes sense to put 4% else where.

My company offers employee stock purchase plans at a 15% discounted rate. I'd rather the $70 or so go towards 1.5 shares. It's at today's tax bracket.


Ok I lied I also have a Roth but just another option for the OP. See if there is an employee stock purchase plan for that 4%

Quote from 0mega : Not to continue the threadjack but I'm in a scenario where I think it makes sense to put 4% else ware. My company offers employee stock purchase plans at a 15% discounted rate. I'd rather the $70 or so go towards 1.5 shares. It's at today's tax bracket. Ok I lied I also have a Roth but just another option for the OP. See if there is an employee stock purchase plan for that 4%

Even at a 15% discounted rate, buying your employer's stock is too risky. You may want to reconsider that. Buying your own employer's stock is not a good financial idea.