Current thinking is, if your employer offers it, to put your money into the Roth 401(k) plan as opposed to the tax deferred 401(k) plan. This is being recommended if you're not going to retire before the next ten years, which I'm assuming you're not going to be doing.
Your company's matching portion would still be taxed when withdrawn, but your contributions and their earnings would be tax-free when taken out.
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Originally Posted by kurty[B]
As far as the money that's in the 401K, do you want to be aggressive with it (at the sacrifice of it fluctuating a bit), or do you want to be conservative, or a mixture of both?
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Consult with an investment advisor, but most of the time when you're not going to access the funds before 5-10 years you want to be fairly aggressive. Also, should you invest poorly (for example, 100% in Enron) you have many years of working to make up the losses.
Stock market historically returns 7-8% annually. Also, what will really kill you is the fees on the funds you chose. Make sure the fee ratio on the funds chosen is less then 1%. Vanguard funds are excellent and well-known for their low fees - making great returns is going to do you no good if you're coughing up the money to someone else.