If your employer does not match your 401k should you not put anything in it?

Problem with 401k is they usually put the money in an actively managed mutual fund and there are higher expense ratios making it worthless no?

In a brokerage or ira you have more control and could choose index funds with lower expense ratios.

What do you guys think?

I personally think that its only valuable if employer matches the 401k.

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I work a contract position and no match on 401k. I elected to participate in the available plan so I can reduce my taxable income by 23,500. That is worth it alone imo.

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As I understand it (and I could be wrong) 401k is PRE tax dollars, so you are technically saving/earning money before you even “invest it.” You will, of course, need pay tax on withdrawals when you retire though. But that’s part of the benefit of contributing to a 401k. Not just the match.

Roth IRA is post tax contributions, but no tax on the backend for withdrawals. Pro there if you’re going to invest on your own but contribution limits are pretty low per year. And you get to choose your options to invest vs limits with your company’s plan.

While you can invest pre-tax dollars from your paycheck into your own IRA I *think* there are the same limits per year ($7-8k / yr max depending on age)

So even if you’re not getting a company match at all, you still have tax saving benefits upfront. But may be limited in how much you can invest.

Another option is to invest in IRA pretax up until the limit to give your more options possibly with less fees. Then invest more money in your company’s 401k.

A financial advisor can probably tell you how much you would potentially lose/gain

I've never really thought about this since my employer has always matched contributions. I guess it comes down to your level of comfort managing investments. If you're knowledgable and comfortable with doing it, actively managing your own investment portfolio makes sense. For those who aren't, it's probably worth the fees to not have to worry about it.

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