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Originally Posted by Cynthetiq
so it's not wise to contribute if you had the income, max to 401(k) (to get contirbution matching), and max contibution allowed (even though not deductible)? (i'm not currently doing that at all, just contribution to my 401(k)
even though I don't get the benefit of the tax advantages, how do I "lock it in" for retirement besides self discipline?
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I would contribute a minimum of the largest amount they would match - if you would like to contribute more, you certainly can, however - I wouldn't recommend contributing more than you are allowed to deduct, as it offers no real benefit over other retirement vehicles, and several disadvantages.
To encourage you to "lock it in" until retirement, the government applies hefty (read: over 30%) penalties if you withdraw from a retirement plan without a qualifying reason. A qualifying reason will allow you to withdraw some or all of your funds out for specific reasons without penalty. Medical Expenses, Downpayment for a home, ect are a couple of qualifying reasons, but from my understanding there are a ton of strings attached.