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Obviously you must have read the FAQ on 401Ks ...

I know zip about Manulife so I can offer no advice there. I'd suggest you pour over the documentation they provide on your different investment choices and try to weigh cost vs return vs risk. Fun isn't it?

The 401K provided by my employer is through Fidelity, however we have a limited set of choices and the majority of the funds are institutional funds ... which means you don't see them listed anywhere except for the documentation Fidelity provides. Makes it hard to get an unbasis opinion if you ask me.

To me the pluses for my 401K are employer matching contributions (can't pass up free money), reduction of earned income, and that you can plow a lot more money into it than an IRA.

Unless your 401K is absolutely horrible, I can't see passing it up.

You wrote:

My husband is suggesting ROTH IRA because, he says, you never pay taxes on that money but I thought it was best to max your 401k contribution because it lowers your taxable income...HELP!!

This is not 100% true. With ROTH IRA you do pay taxes on the money that you are putting in. With a 401K you are contributing pre-tax money ... same with a Traditional IRA (well sort of). With ROTH IRAs you don't pay any taxes on the money you withdraw. With 401Ks and Traditional IRAs you do.

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