Maxing out a 401(k) can seem appealing due to benefits like high contribution limits and employer matching. However, there are drawbacks such as limited investment choices and potentially high fees associated with certain 401(k) accounts. Furthermore, individuals may miss out on better investment options available through traditional or Roth IRAs. The article suggests evaluating whether contributing to these alternative accounts might yield better returns and tax conditions in the long run, especially for those expecting higher taxes in retirement.
You may be better off putting some money into a traditional or Roth IRA instead of maxing out your 401(k).
While 401(k)s offer high contribution limits and employer matching, they may not be the best approach due to limited investment options.
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