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Books and Articles we believe are important

When It Pays To Pay Social Security Taxes

...The significance of the potential for Social Security taxes generating a positive ROI is that, at a minimum, paying FICA taxes for many is less of a “tax” and more of a forced-savings investment with a bond-like return (albeit not available as a liquid account balance and only as a lifetime Social Security annuity payment)...

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Why Paying Yourself 5% Interest On A 401(k) Loan Is A Bad Investment Deal

The end result is that while borrowing from a 401(k) plan may be an appealing option for those who need to borrow – where the effective borrowing cost is not the 401(k) loan interest rate but the “opportunity cost” or growth rate of the money inside the account – it’s still not an effective means to actually increase your returns, even if the 401(k) loan interest rate is higher than the returns of the investment account. Instead, for those who have “loan interest” to pay to themselves, the best strategy is simply to contribute the extra money to the 401(k) plan directly, where it can both be invested, and receive the 401(k) tax deduction (and potential employer matching!) on the contribution itself!

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