Dear Dagen
Save Safe: Dividend Plan Alters Retirement Planning
But you don't need to take action today. There are still loads of unanswered questions about the Bush plan -- most importantly: Will this tax break ever pass?
Even if it does, not all dividends would be free from tax. If a corporation didn't pay taxes on the earnings that are then used to pay out a dividend, then those amounts would still be taxable to the investor. And whatever you do, don't abandon your 401(k) plan. By making pretax contributions, you get an upfront tax break and then get to defer all taxes into the future. "For every $1 you put into a 401(k), you can only contribute 70 cents in a taxable account," says Vanguard's Dickson. And with compounding, that extra money adds up over time.Interested in The Save Safe Plan? Click here for more information and a free trial. Click here to read a letter about this story.
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note |
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|---|---|---|---|---|
| 12,364.65 | 1,305.51 | 2,810.54 | 15.90 |
Oil *
102.45
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DOWN
55.21 |
DOWN
7.81 |
DOWN
26.82 |
DOWN
0.35 |
10 Yr
1.59%
SPDR Gold
152.51
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-0.44%
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-0.59%
|
-0.95%
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-2.15%
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Data delayed 20 minutes |
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