Tuesday, September 1, 2009


As stated earlier, the company I work for is no longer going to contribute to our
401k accounts. What I want to know is if I should continue contributing without the match, or should I stop my deduction and up the amount I set aside at an ING Direct savings account?

I realize that there are some real advantages of saving pre-tax dollars, but I also believe we are about to see some serious stock market cliff diving...so I'm also seriously leaning towards keeping my money in a old Maxwell's coffee can buried in the backyard.

What to do, what to do.....


  1. I'm not a big proponent of Jim Cramer, I think he and his show are more about entertainment than substance, however he does say some things that make sense. In particular, he has said that since 401k plans have very limited investment options and some of them charge maintenance fees, you should only contribute up to the company match and then open an IRA for the rest. A traditional IRA also has the benefit of being tax free since you can deduct those contributions from your taxes. A Roth IRA may make more sense though. It is an after tax account, however if you think you will be in a higher tax bracket when you retire than you are now it may make you more money in the long run.

    That being said, investing in an S&P 500 index fund is the easiest way to manage your money since it doesn't require research into individual stocks, and if your stock picking is anything like mine, will be a lot more profitable. Index funds have lower fees than managed funds and historically outperform the majority of them. Also, since the market is still way down it is a good time to invest. In the next year or two there should be some substantial gains in the market as companies recover from the depression. The NYSE is having a huge blowout sale.

    Finally, if you do go the coffee can route, I would recommend Folgers. Help pad Juan Valdez's wallet a bit.

  2. Stop contributing and hedge yourself against a dollar collapse via a bit of gold, silver and enough stored food water and medicine to last each person in your family for at least 30 days. Preferably 60-90 days but do what you can and soon. Don't listen to me I'm really messed up right now.