What's the right choice for me on 401(k), IRA?

Posted: April 04, 2013

DEAR HARRY: I just took a new job, and I'll be eligible for the company's 401(k) plan in May. I'm 38 and married with one teenage child. The plan does not require the company to make any contribution, but it has been 2 percent of gross salary for some time. I looked over the plan summary I was given, and it appears that the plan administrator has made a selection of load funds available . . . no no-loads. That gives him a management fee and a commission. Good for him, bad for me. If I go for an IRA instead, there will be no fees of any kind if I select the right broker or fund groups. In addition, my choices will be virtually unlimited. However, doing this will lose my company match. Help!

WHAT HARRY SAYS: How about a little of each? Get into the company plan for the estimated 2 percent match. Put the rest of your retirement provision into an IRA. A Roth IRA would be OK if you don't need the immediate tax deduction of a regular IRA. This could very well give you the best of both worlds. Sure, it will take a little extra effort, but I believe it's worth it. Go for a mixture of no-load index funds.


Email Harry Gross at harrygrossDN@gmail.com, or

write to him at Daily News, 801 Market St., Philadelphia, PA 19107.

Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red Cross.

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