401K questions on tax strategy?

401K questions on tax strategy?
I currently put away $50.00 a week in my 401. My company matches about 30% up to the first $60.00. I was able to avoid any major loss this year by shuffling my money around. Currently I'm up a little over 6% for the year. We have a multitude of investment options, most of which took a shellacking this year. I was able to move most of my money into what we call Stable Value. Which is from what I understand mostly Muni bonds and such -- Stable but low return. I currently split what I put in as follows $20. pre tax $10. Roth $20. after tax. I'm not sure what the best strategy is on the tax end. What is better and why ? Please explain. Yes Robert you are correct about the pre /post tax/ Roth. They are listed seperately on my statement as well as the selection process. I guess one is 401 and the other is Roth. I will be 44 this Year so I would hope I have a few years.


Answers:

Robert:  How long before you need the funds? The longer the period the more the "Roth" makes sense. This is because at retirement the account will have less of your taxed deposits and more of the tax free yield. If you have a short time horizon then the "401k" is better because there will be mostly pretax deposits and less yield, or earnings. I don't understand your allotment. You write "$10. Roth $20. after tax" but they are both after tax. So you really have $20 pre-tax and $30 post-tax.
2009-07-02 17:47:13
Chosen Answer
$so fresh so clean$ (3 for 3):  From what it seems, you have both a 401 (k) and a Roth IRA. You're getting the match with the 401 (k), but you're getting tax-free earnings with the Roth IRA. But to answer, the Roth is better for tax implications.
2009-07-02 18:01:47