401K Optimum Expense ratio

I wrote about this,

limit of my analysis was that I had to lock down a few variables, timeframe, tax bracket, etc. I concluded that with fees over 1%, you should contribute to capture the matching funds, but no more. Vesting really doesn't change this, since I looked at a longer timeframe anyway. If the average is 2.2% what are the lowest funds expenses? I have a couple foreign funds that are pushing 2%, but the S&P fund is .05%. So I load up on S&P at work, and use outside IRAs and post tax accounts to diversify. BTW, you may want to organize with fellow workers to complain about these fees, this is really out of line. JOE

At least contribute enough to get the max matching.

With all due respect that shouldn't be your goal. Would you rather make $0.00 a year and have no taxable income or make $1,000,000 but have to give 33% to the government? Your goal should be to make every dollar you have work as efficiently as possible for you. Its in teh same vain as not "letting the tax tail wag the dog".

At least put in enough to get the full match. Even if the return is eroded by high fees, it is highly unlikely that you will do better in an IRA once the match is accounted for. If your wife leaves her employer after a couple of years how much harm does it really do to your portfolio?

Because your wife is "covered" by a 401(k), her traditional IRA contribs will likely not be deductible (or at least partially phased out) whether she contributes or not. Refer to IRS pub 590. Around page

13 or 15 I think.

A word to the wise, my wife and I didn't contribute to her 401(k) the first year she became eligible because the expenses were little high and we thought she wouldn't be at that job for long. She ended up there for 6 years. I still kick myself for missing that first year, even though it wasn't much money.