41k before or after taxes?

[gmoreno]

I was reviewing my 401k stuff. I wonder what is best. For my contributions to be after or before taxes?

Thanks

[GhostDawg]

Before taxes, that way you get tax on the remaining money.

http://www.401k.com/401k/pfp/rp/taxes.htm

[gmoreno]

so why would someone do it any other way?

[GhostDawg]

It may depend on your job's plan setup. It may let you add so much into before taxes and the rest in after taxes.

Read your plan's docs carefully.

[coltrane]

Before

[binary_boy]

When your money goes in before taxes, that means when you withdraw it, you are taxed on the principal and the earnings.

If you put the money in after tax, then when you withdraw it you are only taxed on the earnings, since you've been taxed already on the principal.

[coltrane]

Thats the idea, dont withdraw it
I hear there are ways around that, Id have to do more research on that though