I know this subject gets covered over and over on the blogosphere. But, here goes:
I recently got a promotion and a raise+bonus. All of my earnings will still be in the 25% bracket (but, I plan to try to stay in the 15% or whatever low bracket once I save enough, so tax deferral is a good thing). Up until now, I haven't really made enough to max out my 401k and save some taxable monies as well (what can I say, I like to grow the taxable stash more than the tax-deferred).
Now, I am thinking of bumping up my contributions to my 401k to make it to the max by the end of the year. At the beginning of the year I only put in a paltry 10%. I have since gone up to 20% and am thinking of going even higher for the rest of the year to hit the $17,000 cap, but I will not be saving nearly as much as I would want in taxable space so it is a sort of sacrifice.
The way it will pan out for the next 4 months for me will be a maxed out 401k contribution+maxed out ESPP and a small amount every 2 weeks to my taxable savings.
So what do you guys think. Should I just go for the gusto on the 401k and max it out and save less in my taxable space? Or should I just pay the taxes in the 25% bracket and invest in taxable accounts?
Side note, Just in case somebody asks, I have already maxed my IRA as well.