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amber1
LIF Infant
Member since 4/06 190 total posts
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TDA/Retirement Question
For those financial whiz moms- which would be the better retirement account to max out? My TDA with a 7% guaranteed fix rate of return or my husband's 401(k) with a 25% match on every $1 that he contributes?
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Posted 7/22/13 7:01 PM  |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14007 total posts
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Re: TDA/Retirement Question
Why not do both? 7% is a great rate now but that doesn't mean that it will always be a great rate. If we move into a period of high inflation, that rate may be low in comparison to what you would be able to get. As for your husband, it they match 25% of each dollar, then he kind of automatically gets a return of 25% up front and then can reinvest that in an investment portfolio of his choosing. If he invests in an equity portfolio, it will move up and down but it could ultimately, have a total return greater then your 7% not including the upfront return of 25%.
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| Posted 7/22/13 7:23 PM |
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amber1
LIF Infant
Member since 4/06 190 total posts
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Re: TDA/Retirement Question
My scenario is if you cannot afford to max out both. Does it make sense to hedge the market and do 50/50 so both put in 10% of salaries or have one max out in the better option and the other contribute a small amount?
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| Posted 7/22/13 7:26 PM |
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FranM
And so it goes....
Member since 9/05 2217 total posts
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TDA/Retirement Question
This a nice problem to have! Does your DH have to vest into that 25%? If so how long will that take and does it appear likely that he will stay with his company until he is vested.? If he will or is vested in his plan and it has decent investment options I would max out the 25% first but still put as much as you can into your TDA @ 7% .
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| Posted 7/22/13 7:51 PM |
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amber1
LIF Infant
Member since 4/06 190 total posts
Name:
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Re: TDA/Retirement Question
He has to stay at his company for 5 years. Not sure if he will- he just started.
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| Posted 7/22/13 7:55 PM |
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Blazesyth
*yawn*
Member since 5/05 8129 total posts
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Re: TDA/Retirement Question
Posted by amber1
For those financial whiz moms- which would be the better retirement account to max out? My TDA with a 7% guaranteed fix rate of return or my husband's 401(k) with a 25% match on every $1 that he contributes?
Do they only match 25% up to a certain amount of money?
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| Posted 7/22/13 8:46 PM |
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amber1
LIF Infant
Member since 4/06 190 total posts
Name:
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TDA/Retirement Question
25% of all employee deferrals up to IRS max
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| Posted 7/22/13 9:12 PM |
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dlj97
LIF Adult
Member since 7/10 4399 total posts
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TDA/Retirement Question
Does yours vest right away? I would rather the guaranteed money since 5 years is a long time to have to be there.
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| Posted 7/22/13 9:37 PM |
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