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401K or IRA

IRAs give you more options, so it's more flexible. And if, god forbid, you had an extreme emergency requiring taking some money out, 401Ks usually have some added fees in addition to government penalties.
 
Uphill In The Snow said:
IRAs give you more options, so it's more flexible. And if, god forbid, you had an extreme emergency requiring taking some money out, 401Ks usually have some added fees in addition to government penalties.
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Yeah someone I know had to take money out form their 401k because of an emergency. She needed 6 grand and they took out nearly 10 to cover the penalty and fees. Insane!
 
I have always heard that 401K's are better but I never did one of these myself. Have you tried looking at comparisons online?
 
The rule has always been:

A) 401k to employer max matching
B) ROTH IRA to Max
C) return to funding 401k to max

So if I were you I would start a ROTH IRA and once you max that, you can increase your 401k.
 
Yeah, always take advantage of the "free" money from matching. You can always wait for it to vest and then roll it to an IRA later.
 
We contribute 401k till matching, then max out Roth IRA or IRA. 401k investment doesn't give you much of selection or control. Funds options are determined by employer, investment date is determined by your pay date, and all 401k funds take higher expense ratio than the same ETA or mutual fund in regular stock or IRA account. 401k has many limitations to investment. To be honest, if not because of matching from employer, IRA would definitely be better as you have full control of the investment options and timing of buying. You can't even set aside cash in 401k for future investment opportunity without losing money to expense ratio, as they force you to put money in a fund which always pays the fund administrator certain%.
 
I would go with a traditional IRA or Roth IRA depending on your tax and income situation. This way you can go with a low-cost IRA through Vanguard or Fidelity, and have a large range of options for investment allocation. Fees add up to significant amounts of money over time, so even a 1% or .5% difference in fees is worth it.
 
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