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A Fall 2013 Roundup

A busy week, with some great articles to discuss. At Bargaineering, Miranda gave some guidelines on How to choose between a traditional 401(k) and a Roth 401(k). It takes a bit of math and analysis to calculate the better option, and Miranda’s advice helps provide some insight to this process.

At Monevator, Why I’m not paying off my mortgage. The math is simple, his mortgage is currently 1.24% The Accumulator is comfortable his investments will beat this rate long term, so instead of paying off the mortgage, he’s staying fully invested. This issue has people on either side and a whole bunch in the middle. I’m in the group that will be paid off before retiring, but not in a rush to accelerate payments to end it sooner. How about you?

Len Penzo tells it like it is, he doesn’t mince his words. And it seems neither do guest posters at his blog. This week, Joe Saul-Sehy advises, Don’t Be a Moron: How One Man Paid $87,500 in ‘Moronic’ IRA Fees. You read my delightful and informative article A 401(k) is not an investment? This one could be a great follow up to it, alternately titled “An IRA is not an investment.” Against all the good advice Joe S had to offer, a client “cashed out” his IRA, and was left with a huge tax bill and penalty. The title was slightly misleading, to me a fee is something else, but the story brought a tear to my eye as I considered how many hours the story subject must have worked to earn this money, and it was gone with one stroke of a pen.

At I Heart Budgets, Jacob asked a question – What’s Your Percentage? He’s saving 6% of his income and would like to increase this number to help pull in his projected retirement date. A nice goal, Jacob.

Ninja at Punch Debt in The Face tells us, “I hate paying for things that we don’t use.” I don’t blame him. It’s bad enough to spend money on the necessities, but to see it go towards things you don’t use is just awful. No Netflix for me, either, Ninja.

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