Savings and Investment Allocations....

[Bades]

My 401k matching doesnt start until July 29th 2012. The match is dollar for dollar up to 5%.

Currently putting in 7% ($160.42)

I'm thinking until the matching starts I put that $160.42 into an IRA? I could get $481.26 (3 contributions) in an IRA before April 16th.

I have $11,000 in a house fund. I'm trying to see if it would be a good idea to take out of that with the $481.26 to max out an IRA for 2011? Put whatever I get back in taxes (should be around $3k+ this year, if I open an IRA and max it) right back into the house fund.

Starting July 29th 2012, put 401k to 5%, and take the left over 2% (currently saving 7%, want to save 5%, will have 2$ extra to save). Use that 2% to replenish the money I took out of house fund to max my IRA, which would be around $91 a month.

I want about 35k by August of next year in the house fund. Hoping to put away about $1500 a month towards house. I know some months I wont be able to hit that, but I also have a couple freelancing gigs this year, that I hope to make 5k+ that will go right into house fund, and taxes for 2012 will go into house funds too which will help offset those months I come out short.

Bottom Line:
Seeing if it's worth to take out of house fund now, for a 2011 IRA tax benefit.

It seems logical too me, IF I can replenish the house fund money I took out in time for Aug 2013.

[Bades]

Looking at the 8880, Credit for Qualified Retirement Savings Contributions, form for the tax benefit...

[bjl584]

July isn't that far off really. I may stay the course, or drop 401K contribution to 5% now and use the leftover to start a IRA and/or bump up the house fund.

[Bades]

I checked out the 8880 form more closely and it appears I can add up my 401k contributions and IRA but the credit is only good for a maximum of 2k of contributions. So all I need to do is subtract the difference of 2k from my 401k contributions from 2011 ($1126).

[vips]

I thinks if we go for saving and investment plans then provider company allocate some money in certain funds which gives returns as per its value. Most probably people invest in growth fund or debt fund where allocation charges are reasonable but returns getting are lower than the equity fund which has maximum risks.