should you put money into 401K with ...

[Goldy1]

no employer match? MY husband used to. We also have roths. We can afford to not have the whole paycheck(menaing to put some of it in the 401K)

[creditcardfree]

Sure. We do. We max our Roth IRA's and contribute 7% of my huband's basic salary to the TSP (military - Thrift Savings Plan) which does not match any contributions. We end up saving about 16% of our gross salary for retirement each year.

The benefits are more money to retirement, other investment options you might not otherwise consider, less money taxed in the present, tax deferred earnings.

[kork13]

In my opinion, there's nothing wrong with it. I don't get a match, and neither do many, many people across the country. You're taking advantage of the Roth, so that's great. Max that out first. But after that, if you still have more cash you want to save for retirement, the 401k is great (match or no match). It still decreases your annual income (reducing your tax bill), and savings is savings is savings. You'll also probably hear about the idea of "tax diversification" for the future, which is a valid point.

Try to think of it with the counterpoint -- if you don't put money into the 401k, what would you do with it? Put it in a 0.X% savings account? Spend it on stuff? The only "better" idea is to invest it in a taxable account. And guess what -- there's no match there either! The advantage is that it's accessible. However, you lose out on the tax-advantaged quality of the 401k.

So if you want the money for a particular purpose (home, car, education, etc), or have some other reason to expect you'll need access to the money, sure... Invest it outside the 401k. Otherwise, use the 401k.

[disneysteve]

Definitely. At her last job, my wife had a 403b, the non-profit version of a 401k. There was no match but I still had her fund it as much as she could. It reduced income tax and the money in there grows tax-free until retirement. As long as you are also maxing Roths, I would definitely do a 401k without a match over a taxable account in most cases.

[Goldy1]

We were doing about 10 to 20% in the non match 401K and only putting about 2 grand if that in the roths (there was more money going into the 401K)

[MonkeyMama]

I'd add one caveat. It depends on the 401k investment choices. Some of them are terribly atrocious - and you could do better in a taxable account. (Or would make a ROTH much more appealing, in comparison).

How much you put where, would also depend on your budget and tax bracket. If you were in the lowest tax bracket, I'd advise the ROTH, first. If you were at the 25% Federal tax bracket, I think either would be okay. If you need the tax break now - put it in a 401k and take it now. If you can delay immediate gratification, fund the ROTHs first.

I'd certainly utilize a 401k, regardless of match.

[JBinKC]

I wouldn't bother if there weren't an employer match because of the limited scope in your investment alternatives.

I would do a self directed IRA because you would have an unlimited number of investment selections (to even include going short) and the account would also have more liquidity.

[jIM_Ohio]

Sure- if you have Roths maxed, the 401k tax deduction and tax deferral are good choices.

[zetta]

I wouldn't bother if there weren't an employer match because of the limited scope in your investment alternatives.

I would do a self directed IRA because you would have an unlimited number of investment selections (to even include going short) and the account would also have more liquidity.

One thing to note is that you can only put $5k each into a ROTH or IRA (not both), but you can put up to $16.5k into the 401k.

You should aim to put 15% toward reitrement. 15% of $66K is $10K -- if you make more than $66k, you'll need to put money into a 401k or taxable account to meet your retirement savings goal. After you've got your EF in place, it makes sense to get the tax deduction.

[LivingAlmostLarge]

Sure we do both maxed out.

[Goldy1]

I am guessing we might make 50K this year if that(with only husband working) and we have one child (our monthly expenses are low, no cc debt) so I dont' know if it is a tax advantage or not to put into 401K no match. Dh is wanting me to decide.

[creditcardfree]

Any amount you of earnings you put into a 401K is less that would be taxed in the current year, so it always a tax advantage. Yes, a bigger advantage to someone in higher tax bracket, but an advantage either way.

A match is just icing on the cake. Extra money you didn't have to put in out of your traditional earnings. A 401K with no match is not a bad thing...or at least not something to avoid!

[sherylcarter]

I would do a self directed IRA because you would have an unlimited number of investment selections (to even include going short) and the account would also have more liquidity.

[sherylcarter]

this is great

[sherylcarter]

I would do a self directed IRA because you would have an unlimited number of investment selections (to even include going short) and the account would also have more liquidity.