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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I recently watched the Frontline special on 401Ks.  If there is no employer match I'd probably not choose to invest my money in a 401k, you can do better yourself.

(Highly recommend the Frontline episode)[/quote]

explain. i have no employer match but max out my 401k for the tax benefit.  i don't understand what you mean by "you can do better yourself."  most 401k plans have a variety of funds you can choose from (most of my money is in an s&p 500 index fund, with some in a bond fund, and a little bit in an actively traded growth fund). [/quote]

The frontline episode is worth a watch, but there is nothing groundbreaking in it if you understand compounding and have looked at your fund fees before. Bogle (vanguard founder) explains that if you have an average return of 7% in a fund and management expenses of 2% you end up losing a ridiculous percentage of the gains to fees (i forget his exact numbers, i think he said 2/3s). They also go into the lack of transparency in the world of financial advisors and how unless they are fiduciaries they are under no obligation to act in your best interest.

In the end it depends on the quality of the options in the 401k and your situation. If the options suck and there is no match, maybe the tax deferral doesn't make sense, or maybe the deferral amount puts you under the IRA income ceiling or certain tax credits, so there is a benefit there and you put money in for the deferral and move it out (rollover) if you leave the company or if the plan allows it. I have had some 401k plans that have been awful, few choices and high fees. But my current employers plan is great - several institutional vanguard funds that have untouchable fees that you can't get as an individual (.02% for an index, .08% for a target retirement).[/quote]

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