I'm 25, married, with combined income of $120,000 in southern CA. Should I contribute money to my company's 401k (I don't need to contribute anything to recieve full employer contribution), my ROTH IRA, or save for a down payment on a house?
2006-08-29 04:51:43 · 7 answers · asked by Cardinal Rule 3 in Business & Finance ➔ Personal Finance
#1 Debt - pay off all your long-term debts and pay off credit cards in full each month. None of it is tax-deductible
#2 House. Prices are falling so you will get more for your money.
#3 Retirement - after buying your house and you stabilize your monthly budget for a couple of quarters
#4 Childrens' college education - lots of options in the future: scholarships, grants, state colleges, work-study programs, etc.
2006-08-29 05:02:37 · answer #1 · answered by Tom-SJ 6 · 0⤊ 0⤋
With $120k in earnings there is no reason you shouldn't be able to both contribute to your 401k AND save for a house. Remeber, the 401k dollars are taken out pre-tax. As a result, you will see only a minor hit in your bottom line if you make the contribution.
So again, not sure why it is an either/or decision. Living in CA myself I know it is possible to do both- you may just have to cut back on other expenses if that is really an issue.
2006-08-29 12:02:54 · answer #2 · answered by QandAGuy 3 · 0⤊ 0⤋
try to do both. even if you only contribute 1% of your check to the 401k it works. at my company you can take a loan against your 401k or at a later date withdrawl from the 401k to by a house.
it helps alot if you chooses the later. Does your company match you contribution. if so i would invest as much as the company will match in the 401k and pull the money out in a few years to buy the home.
2006-08-29 11:59:50 · answer #3 · answered by staci m 4 · 0⤊ 0⤋
You should at least max out your Roth each year. Then the rest can go towards saving for a home. You aren't going to want to buy in that area any time soon anyway and you don't want to miss out on retirement savings.
2006-08-29 13:45:16 · answer #4 · answered by personal_finance_101 3 · 0⤊ 0⤋
I would save for a down payment on a house. If you are currently renting you are "buyng air".
2006-08-29 11:57:39 · answer #5 · answered by dkmcb02 2 · 0⤊ 0⤋
you are only 25 years old, you have plenty time to save for your retirement. i will buy house .
2006-08-29 14:22:41 · answer #6 · answered by bianca 4 · 0⤊ 0⤋
put some in each account. save while you can next week you could be unemployed
2006-08-29 11:59:30 · answer #7 · answered by norsmen 5 · 0⤊ 0⤋