View Single Post
  #4 (permalink)  
Old 08-09-2005, 02:14 AM
mbhunter mbhunter is offline
$ Saving HS Freshman
 
Join Date: May 2004
Location: Virginia
Posts: 106
Points: 990.00
Donate
Default Re: Sophmore in college

Good job on starting to save early!

A Roth is a good choice. Just be aware that if you withdraw from it as pennywise says you can do, you can't put it back in -- your yearly contribution limit is not "net," it's gross. So if you were to take out $10k this year, you can't put in $14k as a 2005 contribution -- only $4k.

401(k)'s can be a good deal as well if you have employer matching. They're less liquid and tax-deferred growth rather than tax-free growth, but if you get matching by your employer it's just like free money.

How much you put into these investment vehicles depends on not only your long-range goals but also what you plan to do in the short term. Down payment for a house, business investment, grad school, marriage, kids, etc., might dictate how much you sock away in these tight containers. It's good at least, though, to squeeze out all the matching you can from your employer. Whether you contribute as much as you can is another story, but at least get the maximum match.

My 2 cents Best wishes!
Reply With Quote