"John A. Weeks III" <john[at]johnweeks.com> wrote in message news:<220720040011267049%john[at]johnweeks.com> ...
- quote -

The contribution limits to IRAs are much lower than for 401(k)s.

I think the government ought to create a unified cap so that
individuals could contribute a total of $X annually to IRAs and
401(k)s, but that is a public policy question.

The general rule of thumb is to put as much as possible in tax defered
accounts. However I believe it is possible to earn a higher after tax
return in an after tax account. For example if you invested in an
index fund or a fixed portfolio of blue chip growth stocks, the annual
dividend and capital gains would be small. When you sold the
investment, it would be taxed as capital gains rather than ordinary
income.

Frank

"msmap" <msmap[at]houston.rr.com> wrote in message news:<BgELc.13392$WP1.3168[at]fe1.texas.rr.com> ...
- quote -

On Wed, 21 Jul 2004 20:10:59 CST, "msmap" <msmap[at]houston.rr.comwrote:

- quote -

It depends on what type of investment category you wish to use. If it
is something that produces ordinary income - CDs, taxable bonds, etc.
- you can make a case for a tax-sheltered arrangement like
non-deductible 401k or IRA. Also, remember these plans are mostly
illiquid until 59.5.

But if you're going to invest in stocks for long-term growth (capital
gains), you could make a case for staying away from retirement plans.
That's provided you pick a fund or stocks that are tax-efficient.


-HW "Skip" Weldon
Columbia, SC

In article <BgELc.13392$WP1.3168[at]fe1.texas.rr.com> , msmap
<msmap[at]houston.rr.com> wrote:

- quote -

I don't like giving up direct control of my money by putting it in
a 401K (other than what you can do as a payroll deduction). There
is no reason that you cannot open up a traditional IRA. You may not
be able to deduct it, but at least it grows sheltered. There are
other ways to invest money that avoids some taxes, such as munis
and government bonds. Finally, if you have a lot of after-tax money
to shelter, the insurance folks in this group might have a group of
tools that can help you. If you have an agent, check with them.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

Does make more sense to put money "after tax" into a 401(k) as opposed to a
non tax sheltered account if a person can't contribute to a Roth IRA?