Is this a good plan for dealing with a 401(K)?

Currently we are putting 450.00 post tax income into my wife's Roth account every month.
Next month she becomes eligible for a 401(k), so we are going to take advantage of it, putting as much into it as possible to get the pre-tax savings and the 25% match. what ever the tax savings equate to, we will increase her allocations that much.
Once we reach the point wherein the employer will not match any longer, we will switch to the Roth and it's 4K yr cap.
Her Roth is using a few different funds for diversification and growth.

Thoughts, Better idea's?

This sounds like a really good plan. When I read the title to this question, my brain screamed "ROTH!!", but I'm glad to see that you're already up on that, and only contributing to the 401(k) what her employer will match.

One other thing I'd suggest is making sure you have sufficient cash reserves - a true "Rainy Day Fund" - in a high yield savings account. Right now I'm getting 5.05% with HSBC, and know there are a couple other places out there that will give you a comparable rate.

Additionally, think about short-term holdings - things that aren't cash reserves, per se, but can be liquidated in a 6 month to 1 year timeframe, like CDs. You can get a little better APR/APY on those than the high yield savings, but still feel like you have access to your money without suffering early withdrawl penalties if something catastrophic occurs.

I'm not a financial expert, but you sure can't beat putting as much money as you can into a 401(k) when your employers is matching it. That is a lot of money, so you sure wouldn't want to loose it, so hopefully the employer has someone to invest the funds wisely for the company. I've heard that you shouldn't put all of your 401(k) money into employer stocks. It probably would be a good idea to talk to a financial advisor, but don't blindly follow them either--do your research and do whatever it takes to rest well at night when it comes to your money. Good job.

you sound like a financial expert. that is exactly what we do and what is recommended in all the retirement books...max out the company match on 401k then roth the rest

Just get all the knowledge you can on caps per year and all that. There are caps on Roth IRAs per year. you may also wnat to talk to an investment Rep about annuities..they can help too. The market is up and down now, get into a program that will grow without the stock market. you may also want to look into Money Markets , they don't get tax breaks but you can save without the loss and turn it into money earned instead of lost. be smart and talk to an investment rep at your bank. they are free of consultation fee's and they have great advise.

I think you have the savings and switching between 401k and Roth correct. You also seem focused on savings for the future which is great.

You might want to check on what the investment choices are in the 401k plan. Sometimes they are dogs. In any event manage the Roth and the 401k as one savings plan i.e. If the best funds in the 401k are a large cap and mid cap then get the balance by putting the Roth in international, small cap and bonds -

If the investment choices are fairly similar you probably want to have your riskier investments in the Roth - since you don't have to take money out of a Roth at 701/2.