At the very least make sure you take advantage of your company match as stated. Pre-tax dollars can actually grow faster in a neutral (given the same returns) environment, well because obviously the money has yet to be taxed, and there is more of it at work for you. Another advantage of 401K is the autopilot mode of deducting from your paycheck. It is undoubtably a cliche but you don’t miss what you never see. Although 401K’s have limited choices, for individuals without a lot of investment experience, learning how to make those choices work best for you is a good introduction to investing.

If indeed you are on track to have your 401k meet your objectives as J Money has provided ample resources to determine, then go Roth IRA. To invest in a traditional IRA would be redundant to the 401K plan you already have. And there are sooooooooooo many advantages to a Roth. J could do an entire section on this area.

But I always reassess the portfolio mix quarterly for the 401K, and even though the investment choices are not now what I would have available in a IRA, I get to roll over the total balance if I leave the company (albeit a regular IRA). At least I have managed in the meantime to build a nice healthy balance to really put to work.

Cheers,

Bill