Quote:
Originally Posted by RunKC
So any extra money I want to save should be put in my 401k?
|
I'd say yes, once you have a sufficient rainy day fund. Why?
1. the money you put into the 401(k) doesn't count as income in the year that you make it.
2. it grows tax deferred. So any trades, any dividends, any anything, is tax free until you start taking withdrawals.
The trick is you can't take it out anytime soon, so it is NOT where you want to put money that you might need later to, whatever, buy a house, an engagement ring, a car, etc. But yeah, other than that, 401(k) is a great place to save.