The main reasons to participate in your employers 401k plan are 1) employers match, 2) large pretax contribution limit, 3) funds grow tax free until distribution in retirement.If you find your investment choices unsatisfactory or expensive, you could shift funds to max your Roth IRA. But be sure to keep your 401k at least enough to get your employers match.Investments in a taxable account and invested in the long term buy and hold style can theoretically do better than an IRA or 401k because you pay taxes only when you sell and then at capital gains rates. But as a practical matter, many end up selling due to market gyrations and paying taxes sooner than they planned. So if you are considering a taxable account, try it and see how you do before you give up on 401ks.At your age, personally I would not be too concerned about bond holdings. As your assets grow and you get closer to retirement, you can always add a bond fund, but for now, that position is almost theoretical. Index funds are the way to go. A combination of total market and international should serve quite well.Even if your expenses in the 401k are a bit high right now, it is still tempting to fund it to the max. One day you may have a different employer or a different 401k plan. When you leave the company your funds can go to an IRA or a future employers 401k plan. The higher contribution limits probably mean a larger account balance from the 401k than you will be able to accumulate otherwise.
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