Is an IRA better investment option if my employer does not match 401k contributions? Also, the funds avaialble through my 401k are not that great in terms of returns. Would it be better to go with an IRA? If yes, which IRA would be best - Traditional or Roth? Thanks for your time.
Martin
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Brian
Take the IRA option, if there are no matching funds for the 401K. It will allow greater freedom of where to invest your money. If bonus monies or special stock shares or something go into the 401k set that up, but put minimal input into it.
Traditional IRA is tax deferred, so you get the benefit of not paying taxes on the money, currently. Roth has no penalties if you need access to the money at some point down the line for emergencies or something.
Karen
I like the 401k as no matter how much you make your contributions are 100% tax deductible. Also you can put more annually into a 401k than you can an IRA. One day your employer may provide a match or a profit sharing contribution. One advantage to a self directed IRA is you’ll most likely have more investing choices.
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