5

I know there are a few different factors to this, such as if you've reached the contribution limit for the year on your 401(k). With a 401(k) you can get employer contribution matching and a higher contribution limit.

So other than reaching the contribution limit on your 401(k), when would you want to contribute to an IRA over a 401(k)? Does traditional versus Roth accounts make a difference?

JoeTaxpayer
  • 172,694
  • 34
  • 299
  • 561
AverageWorker
  • 640
  • 2
  • 6
  • 15

1 Answers1

8
  • you have already deposited up to the employer match on the 401(k) and the IRA is more attractive. (Features listed in other bullet points)
  • the 401(k) does not offer the Roth version, and you prefer that as an option so you use Roth IRA
  • you already have $100K+ in the 401(k), so the loan option is already optimized (i.e. the $50K limit is available)
  • you like the strategy of converting to Roth over time.
  • The 401(k) fees are high. After the match, it's just extra cost
  • The 401(k) investing options are not varied enough or to your liking. IRA has far more flexibility
  • (more to come)
JoeTaxpayer
  • 172,694
  • 34
  • 299
  • 561