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RE: SF Sr. Oracle DBA wanted - full time, perm

From: Eric D. Pierce <>
Date: Thu, 10 Aug 2000 12:58:04 -0700
Message-Id: <>

> Is it a right translation : 401K = 401 000 $usd ?

to add to the other comments:

For young employees, please pay attention to 401k issues, it can save you a lot of money during your career, especialy if you sign up early. ***

401k is a section of the US Federal tax code (regulations). Basically a 401k "plan" is a retirement income savings instrument.

(as an education employee, I use a section 403b plan instead.)

401k is a way of "sheltering" pre-tax income, and reducing current taxable *net* income (taxes on the untaxed income must be paid years later). Supposedly, 401k works especially well in conjunction with the standard tax reductions that the us govt allows for interest on home loans. eg, at the beginning of paying off a loan on a typical $130,000 house here in Sacramento, I was told to expect an approximate $200-250/month "tax break". The 401k "tax break" would be about an additional $150-200/month if the 401k was "maxed" (at least at my pathetic peon data tech govt salary, all the rich USA DBAs might get double that at least).

You take the 401k money out after retirement, and the theory is that because your income is lower, you will pay less tax on it than during your earning years since the tax bracket (%) is lower for less income.

The problem some people are getting into is that their retirement income has actually gone up a lot (because they had retired "early", or they are living a lot longer, and they have COLAs {cost of living allowances/increases}), and when the time limits on 401k (& other retirement investment plans) comes up, they can get stuck with higher taxes than they had anticipated. This problem is usually made worse when older people typically don't have tax deductable interest on home loans. This actually happened to a family member who went in the military as a teenager (WWII B17 nav), and retired in 1974 before he was 50 years old. Received on Thu Aug 10 2000 - 14:58:04 CDT

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