401k no match

[Anonymous]

We rep a pretty big company the reason they don’t match ins because we have profit sharing. My last 2 posts are my options at the moment I’ve got everything spread out in growth and aggressive growth. I’m 25 years old.

[iced]

Those options complicate the decision. While they're decent from a selection perspective, those expense ratios...ouch.

[Revelate]

That's a good point Badabing.

There's a couple reasons though which I think it's more edge case personally.

I do think much like investments that one's tax strategy should be diversified too, as a result, stuffing money into a 401k is a darned good hedge on that front.

Secondly, 401k contributions are limited in the time domain, brokerage account ones are not.  Admittedly investment growth is too, but it's a lot easier to catch up on the brokerage side than it is with tax advantaged accounts and certainly early into one's savings plan I'd absolutely suggest capping that 401k unless the options in the account are terrible (and there are a lot of bad 401k's admittedly).

Finally I don't think in the modern economy people are going to have to worry much about in service distributions: average tenure at a company is falling, probably darned quickly and those who are still working at some place for 30+ years probably have a pension too... which is to say becoming more and more rare over time.

[tacpoly]

I agree with @bada_bing :  contributing to a 401k is not as cut and dried if there is no match.  At most, I would contribute enough to drop your income to a lower tax bracket and I would only do that if your funds options are good (i.e. good funds, no loads and very low expense ratio).

Unfortunately, this doesn't seem to be the case for most of your investment options, which are mostly Class A funds.  That means you get charged a fee when you buy (front load) as well as the regular annual management fee.  The Class R funds may charge you yearly commision in addition.  You really need to read the prospectus of each fund you are interested in buying into to make sure you're not losing money on fees. 

If your income tax rate is pretty low and it is available to you, I would consider putting money into a Roth 401k and invest in the State Street S&P 500 Index fund (the management fee is still high...but it's the best option you have) to get the advantage of tax-free growth.

[bada_bing]

One potential place to put savings if you are looking for more Roth space

as an alternative to your 401K plan is to check if your plan allows the

maneuvers to accomplish the "Mega-backdoor Roth". It is somewhat

unlikely, but not impossible your plan allows it, and worth checking into.

Call and ask your plan administrator if your 401K plan allows after-tax

(non-Roth) contributions and also allows in-service distributions of those

contributions. The majority of plans do not, but a significant minority do. 

401K plans designed for higher earning employees seem to be more likely

to have the necessary provisions.

If you find that your plan does allow those two actions, you've hit a jackpot as

far as Roth savings limits. It would allow you to move as much as $55K per year

of savings into a Roth IRA. So it is well worth checking into.