Comments on: Alternatives to a High Cost 401k Or 403b Plan

By: DQ

DQ — Wed, 09 Jun 2010 21:24:36 +0000

Have you given any thought to what are called Brokerage 401k’s, also known as self directed brokerage 401k’s? This is where an employer has allowed the employee to move their money to a brokerage firm (schwab, fidelity) and all funds available on those platforms are available. I mention this because you can then finally make a best of class 401k where the funds you acquire are no- load funds, with low fund expenses, and your money is operating in the realm of the best funds like Amana Growth Trust, Fairholme, Pimco Managers Bond Fund, Vanguard funds etc…. Let’s face it, most funds in typical in the box 401k plans are on the whole mediocre at best.

By: TFB

TFB — Thu, 10 Dec 2009 07:44:26 +0000

John - You CAN contribute to both a 401k and an IRA. If your filing status and income meet the qualification, you ARE allowed to take a deduction. See IRS Publication 590.

By: John

John — Wed, 09 Dec 2009 21:50:47 +0000

Does anyone know why you can’t contribute to both a 401k and an IRA? I would like to contribute 5% to my employer’s high cost retirement plan to get the 5% match and then put the balance (up to the allowable limit) in an IRA and deduct it at tax time. Why is this not allowed?

By: David

David — Thu, 15 Oct 2009 21:04:06 +0000

My mistake. I as scanning the article and didn’t realize you were coming from the standpoint of a 401k participant. Carry on.

By: TFB

TFB — Thu, 15 Oct 2009 20:47:05 +0000

David – I’m pretty sure I didn’t have the Roth and traditional IRAs confused. What made you think that’s the case? When you are not eligible for contributing to a Roth IRA and you are covered by a 401(k) plan, your contributions to a traditional IRA are not deductible.

By: David

David — Thu, 15 Oct 2009 20:09:03 +0000

tfb, you have the Roth and traditional IRAs confused. The Roth contribution is non-deductible while the earnings are tax free. Vice versa for the Traditional.

By: Don S

Don S — Thu, 16 Jul 2009 02:31:05 +0000

Excellent info and spreadsheet . . . i guess this is a good template for placing any alternative to the 401k side by side .. .

By: TFB

TFB — Tue, 02 Sep 2008 05:48:17 +0000

@Vig - Roth 401(k) or Roth 403(b) are covered in these posts: The Case Against Roth 401(k) and Roth 401(k) for People Who Contribute the Max.

By: Vig Oren

Vig Oren — Sun, 31 Aug 2008 20:57:20 +0000

Hi tfb, how a Roth 401(k) or Roth 403 (b) would fit in above calculations? Also, by any chance, do you know if USAA Brokerage has an option of “no transaction fees” (NTF), whereby I could buy Vanguards funds at low costs there?

By: arvind

arvind — Mon, 18 Aug 2008 05:18:50 +0000

I just saw that Fidelity has lower expenses 0.1% compared to Vanguard (0.25%) for their US stock market Index fund. If I am planning to just put all my money into an index fund, isn’t Fidelity better?