2007-10-29 12:19:17 · 8 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
I saw an advertisement for a seminar being presented by an investment advisory firm. I have invested in both 401k and IRA over years. Jist of the ad is that we are increasing our tax liability down the road at a time when we'll have no significant deductions. The other mistake mentioned in ad is paying down principal on mortgage. Being a bit of a skeptic I looked up firm on search, is in yellow pages but no website that I could find. Just wondering if anything to concept.
2007-10-29 12:36:23 · update #1
Scam. There is absolutely no downside to a 401k investment other than I have less money to buy a new car with now. Not only can you get free money from your employer and defer taxes to a later date, but you get to earn interest on Uncle Sam's money which you're holding. It's a win win. Not helping me buy that car though.
2007-10-29 14:01:03 · answer #1 · answered by Jay P 7 · 0⤊ 0⤋
Perhaps they meant because the tax rate will be so high down the line on 401k withdrawals. Maybe they are trying to sell a ROTH, get the taxes out of the way now. Since nobody can predict where are taxes or inflation will go (up/down), stick with the 401K first, then if eligible get in to a ROTH. Not sure what they mean about paying down the mortgage, did they say that was good or bad? I try to pay down extra every month on mine, who needs debt when I am 50
2007-10-29 15:14:01 · answer #2 · answered by goofycollector 2 · 0⤊ 0⤋
It's a simple pay the tax man now at a known rate versus paying the tax man later at an unknown rate. They are trying to convince you that tax rates will go up. However, for the majority of Americans the federal tax rate has only gone down. So the assumption that it will only go up is hypothesy and conjecture. Anyone who invests based upon that deserves to lose their money. However, you SHOULD take it into consideration and hedge your bets with a ROTH. Make after-tax investing part of your overall portfolio but don't limit it to only that and certainly don't neglect the pre-tax benefits.
2007-10-30 03:06:10 · answer #3 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
Because if you do it, you may not have enough money for those shoes you want, and all you will get in return is a secure retirement. Buy the shoes! Who cares if you'll be a bag-lady when you are 65?
Who said it was a "mistake"? Don't trust ANYTHING that person says ever again!!!
2007-10-29 12:25:06 · answer #4 · answered by Anonymous · 1⤊ 1⤋
I have no idea who told you that, but they are wrong, wrong, wrong. Let me guess, they have a better place to put your money. Or should I say, they will be happy to take your money. 401k, 1st choice, IRA 2nd choice. Just watch what you invest in and don't spread it around too much.
2007-10-29 12:28:31 · answer #5 · answered by ? 4 · 1⤊ 0⤋
It's not. If you don't save for your retirement, then you'll be broke when 65 rolls around.
2007-10-29 18:56:49 · answer #6 · answered by Steve R 6 · 0⤊ 0⤋
Its a sales pitch to get you to "invest" in something else.
2007-10-29 12:42:54 · answer #7 · answered by npk 7 · 0⤊ 0⤋
It's not a mistake, what in the world would make you ask a question like that?
2007-10-29 12:40:09 · answer #8 · answered by Anonymous · 0⤊ 1⤋