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Invest More Than $10,000 In My 401k?
Saving Is A Worthy Impulse, But Not There
Question: Is there any benefit to investing more than the allowed $10,000 in my 401k? Or should I stop my pre-tax contributions when I hit that mark and put an equal monthly investment in my mutual fund? --Ed, Chicago, Ill.
Answer: Generally, there is no benefit to investing more than the allowed $10,000 in your 401k. The main reason is simply because this is the amount allowed under the federal code for the 401k savings program. Any amount put into your 401k in excess of the $10,000 annual limit calls for a distribution of the income back to you. You are then taxed on the amount exceeding the $10,000, as you would had you not put it into your 401k. Investing the excess in your mutual fund will likely prove to be more beneficial in the long run and save you a lot of hassle.  More 401k advice: The Basics: What A 401k Is And How It Differs From An IRA
Use 401K To Pay Off Credit Cards?
Move 401k Money For Child's Education? What's your financial question? Ask Jennifer!
-By Jennifer Openshaw of the Women's Financial Network. Copyright 1999 Internet Broadcasting Systems. May not be reproduced without permission.
Ask Jennifer: The Archive
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