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Depends on your goals and ST and LT needs.
If you are saving for the long term (retirement) then maxing out K plan would make sense because your money can grow in a tax deferred (pretax) and/or tax-free (Roth) environment.
If you are saving for the short term (home, business, etc) then saving elsewhere may make sense so you can access those funds with no penalty.
As for returns - all account types have the ability to deliver returns it depends on WHAT you are investing in. Yes, some K plans can have limited options, but most will have the ability for “higher” returns. Depends on your risk tolerance and time frame.
Personally, I do the following…
1. Max out 401k ($24,500) with 17% company contribution. Invested aggressively.
2. Max out HSA (family plan). Invested aggressively. Paying medical expenses OOP.
3. Backdoor Roth for me and wife. Invested aggressively.
4. Fully funded emergency fund ($30k) in MM.
5. $40k for home renovation in MM.
6. Save/Invest $10k for each kid ($30k) annually.
7. Rest is invested in non-retirement account or enjoyable spent with no regrets. For example, spending $15k on beach vacation this coming summer!
As you can see… I am funding long term goals and short term goals. My investment strategy for each goal is different.
TC is just shy of $600k (1 income).
It depends on your long term goals and I struggle with this question too. Right now, since I’m relatively young (30), i’m trying to max out my 401k for a couple more years. I may change up and do other investments in 4-5 years since I want to retire early, but for now, this works for me.