On Jul 19, 12:17 pm, "learnf...[at]gmail.com" <learnf...[at]gmail.comwrote:

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With all due respect that shouldn't be your goal. Would you rather
make $0.00 a year and have no taxable income or make $1,000,000 but
have to give 33% to the government? Your goal should be to make every
dollar you have work as efficiently as possible for you. Its in teh
same vain as not "letting the tax tail wag the dog".

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At least put in enough to get the full match. Even if the return is
eroded by high fees, it is highly unlikely that you will do better in
an IRA once the match is accounted for. If your wife leaves her
employer after a couple of years how much harm does it really do to
your portfolio?

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Because your wife is "covered" by a 401(k), her traditional IRA
contribs will likely not be deductible (or at least partially phased
out) whether she contributes or not. Refer to IRS pub 590. Around page
13 or 15 I think.

A word to the wise, my wife and I didn't contribute to her 401(k) the
first year she became eligible because the expenses were little high
and we thought she wouldn't be at that job for long. She ended up
there for 6 years. I still kick myself for missing that first year,
even though it wasn't much money.

On Jul 19, 10:17 am, "learnf...[at]gmail.com" <learnf...[at]gmail.comwrote:
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At least contribute enough to get the max matching.

learnfpga[at]gmail.com wrote:
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I wrote about this, http://www.joetaxpayer.com/401rip.html
The limit of my analysis was that I had to lock down a few variables,
timeframe, tax bracket, etc. I concluded that with fees over 1%, you
should contribute to capture the matching funds, but no more. Vesting
really doesn't change this, since I looked at a longer timeframe anyway.

If the average is 2.2% what are the lowest funds expenses? I have a
couple foreign funds that are pushing 2%, but the S&P fund is .05%. So I
load up on S&P at work, and use outside IRAs and post tax accounts to
diversify.
BTW, you may want to organize with fellow workers to complain about
these fees, this is really out of line.
JOE

Hey All,

My wifes company recently started offering 401K. She makes 85K per
year. My income is 67K. I am putting 12% in my 401K. My intention is
to reduce my taxable income as much as possible.

Their vesting schedule is as given....

0-2 years 0%
2-3 years 20%
3-4 years 50%
4-5 years 100%

They will contribute for upto 4% of gross annual income.

When I was going through the fund I saw the expense ratios to be on an
average 2.2%. At what percentage of vesting will it become worthwhile
to put money in 401K to offset those high expense ratio?

I was leaning towards going traditional IRA till the vesting doesnt
get to 50%. Should we totally avoid this 401K plan and stick to
traditional IRA. I am not eligible for traditional IRA as I put money
in 401K.

Thanks for comments, suggestions......