Should we increase our tax withholdings or just up contributions to our 401(k)?
Up the contributions at least to the point where you're taking advantage of your employer's match. Sure, you can increase your tax withholdings, but that's like giving Uncle Sam a free loan. Instead, collect interest on the money throughout the year, and take the “slam” come next April. The good news: You're not getting “slammed” if you see it coming. Consider an FCIC online savings account or CD. Sites like Bankrate.com or MoneyAisle.com have current bank rates.