Wealth Today

I recently wrote a query for opinions about investing in my 401k vs an IRA and had little response. Thanks to Faisal for the lone advice, I questioned others in my company about the benefits of doing so. I was pointed to a fund with tremendous earnings vs the paltry 3.5%-4.2% of my 401k. Now I’ll be adjusting my 401k contribution to permit the maximum match possible, and then invest any difference into an IRA.

Our company met our goals, so they’re dropping in a bundle of cash into our 401k. It won’t quite be a 100% match, but it’s pretty good.

 The value also went up yesterday to the highest I’ve seen since I’ve been enrolled. That pleased me to peaches.

 This is the first time I’ve seen a company do matching based on performance. I think it’s a good idea, because we really get to feel a partnership with the company, but at the same time I wish it was more like a 100% match and I got whatever I put into it. Currently, I’m not putting enough into it to max out a IRA, but people around me tell me to put the minimum in the 401k to qualify for the performance based match, and then invest the rest into an IRA. If I max that out, then put anything else into 401k. I’m not so certain that this is a good idea, but I’m definitely interested in hearing other people’s opinions on it.

How do you feel about this strategy?