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No. of Recommendations: 3
I'd vote for starting the IRA now. The amount you can put in is limited and you don't get the chance back to "make it up" when you miss a year.
The compound accretion over time mounts up impressively over a 40+
year period until you take it out.
With the IRA you have a lot more choices about what to put your money in. You can try stock picking, do something ultra safe with Treasury bonds, or try to pick the next Microsoft. Or you can put an index fund into your account. In your 401k you have limited options, so there is less to think about and you don't learn as much about the world of investing.
Having a 401k means you are covered under a retirement plan, so probably the IRA will not be deductible. With your long time horizon, however, that doesn't mean don't do it.
Even better is to use other than your retirment money to fund your new house. You might put the house money in an index mutual fund--not that much risk after a 2-year bear market.
Best wishes, and congratulations on starting your retirment fund early! Chris
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