Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
It all depends. For most people, the tax deferred advantages of a 401K plan make it quite attractive. Even if the plan itself is less than excellent, at some time in the future you may change jobs. Then the funds can be transferred to an IRA. That $10.5 max contribution in the 401K is much larger, so more money can be involved.

Of course, you will want to fund your Roth IRA to the max first.

After Roth IRA, long term buy and hold in taxable investments is an excellent option. You have great flexibility and current tax and inheritance laws make them better than IRAs when done correctly. The trick is to find investments that you really can hold long term. Not everyone will succeed at this, whereas the IRA/401K plan is virtually a sure thing.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.