1. I would go with ROTH. A Roth gives you flexibility if you ever need to take your contribution out penalty-free. With a 401K you lose that.

    I like how detailed you are with your retirement planning!
    My recent post And Let There Be Light!

    • Thanks for reading MoneyCone! With the Roth, if you take a withdrawal before age 59.5, I was thinking that the 10% early withdrawal penalty still applied. The withdrawal isn't taxed, but I believe the penalty remains.

      I might be wrong. What do you think?
      My recent post My Year-End Current Asset Allocation and Net Worth Growth – November-December, 2011

      • I may be wrong here, but with the Roth, aren't you allowed to take out your contributions, (but not the earnings), at any time without penalty? Isn't that why some people use this as a faux savings account?
        My recent post Eating Healthy and Saving Money in the New Year

        • This has sparked some good discussion! I did a quick search on this topic, and found a good article from Mike @ Oblivious Investor.

          Looks like you're right Melissa and Money Cone! I was getting confused between EARNINGS and contributions. The contributions can be taken out at any time tax and penalty free. You learn something new every day! 🙂
          My recent post Green Energy Makes Green Money

  2. Saved 33% SE income from your blog to pay your taxes? That part is cool and impressive.

    • Yep! It takes some discipline to set aside some of the money and not save/spend it, but it helps reduce the shock factor when tax time comes around!
      My recent post My Year-End Current Asset Allocation and Net Worth Growth – November-December, 2011

  3. mn_wallstreet says:

    A ROTH IRA is fantastic. However, if you have the ability to contribute to a 401k that offers a match, you're able to receive “free” money. Many 401k plans offer the ability to use ETFs and/or low cost and/or no load index mutual funds (if you'd prefer that over actively managed funds. Many plans also allow for self directed accounts where you're able to buy ETFs, Stocks, or mutual funds of your choice should you plan not offer them.

    Sorry if I'm late to the game on this post but I was just introduced to your site.

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