Divert that raise into 401(k) and postpone taxes

The Ticker

August 04, 1999|By Julius Westheimer

WHEN YOU GET a raise or bonus, do you worry about paying taxes on the new money? Financial consultant David Landay says you can take that money tax-free by contributing the funds to your company's 401(k) or other retirement plan.

"The money becomes a pretax retirement contribution, escaping income tax -- and it grows tax-free until you retire," he says.

The most popular stocks among newsletters followed by Hulbert Financial Digest (with number recommending in parentheses) include: Cisco Systems Inc. (16); MCI WorldCom Inc. (16); Microsoft Corp. (15); America Online Inc. (13); Intel Corp. (12); and Dell Computer Corp. (12).

WALL STREET WATCH: "A recent survey shows that almost all assets held by individual investors [are] already invested in stocks, strongly suggesting that the downside risk in this market is tremendous." (Barron's)

"Despite the prevailing upward momentum, it's a no-win situation. Investors have shifted to a more optimistic mood, suggesting limited upside potential from these levels." (Safian Summary Report)

"When we own stock in outstanding businesses with superior managements, our favorite holding period is forever. We're just the opposite of those who hurry to sell and take profits when companies perform well but who tenaciously hang on to businesses that disappoint. That's like cutting the flowers and watering the weeds." (Peter Lynch in Better Investing)

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