I’m not sure how one goes about that, if you work on a W-2, you are paying social security taxes, if you work on a 1099, your income gets reported, and then you pay taxes.
Are you suggesting not funding a 401K plan ??
I would say a 401K is a good investment decision to make, especially if your employer has any kind of program that matches some percentage of your contributions, until you withdraw the money you control where investments are made with that money, yes you get taxed when you withdraw the money, but investments return prior to any withdrawals are not taxed.
It’s nearly impossible to avoid paying taxes on investments, the key is to delay the taxes and minimize their impact.
Taxes always go up, you are taxed when you use your 401k.. Go Roth and you wont pay taxes on withdrawls or have it reported as income, not 401k or at least split it.
Problem is when you withdraw Ira’s or 401k’s in older age, you end up having to tax a high portion of your Social Security. That’s how they designed it. You might as well have not received much of that SS that year.
If I were to do it again, I would only save in the government 401k type accounts to the extent my employer matched or rewarded it. Otherwise I would invest in long term bonds, CD’s , safe things and just pay the tax as it is due.
Taxes were much less when we were young and working than they are now when we have to pay tax on Required Minimum Distributions.
I agree. You should invest in a 401K at least up to the company matching percentage.
I also think you should have some money outside of an IRA so when you need it, it won’t become a huge taxable event.
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