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A 37-year-old investor with $100,000 in savings and $200,000 in retirement accounts faces a decision on how to deploy the cash now that a home purchase is off the table for at least five years.
The setup centers on whether to move the funds into a taxable index fund, use them to supplement income and maximize 401(k) contributions, or split the difference between the two strategies.
The key variable is the employer match, which covers 4% of contributions, making the tax-deferred option more attractive than a standard savings account.
The Tax Advantage And Cash Flow The original poster currently contributes $11,000 a year to their 401(k). To reach the annual limit, they would need to increase contributions by approximately $12,000 to $14,000 per year.
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