tylerh1701
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401k's are good when your employer matches, because that part is free money (keep in mind the vesting issue that slowdive mentioned though).
Beyond that the only thing I really know about them that's all that good is that you can have the money taken out of your check every month instead of saving it yourself. Again, like slowdive said, good for people who suck at saving money themselves. I have friends who wouldn't save a penny if it wasn't for retirement withholding options like these.
You do need to save for retirement though, so put your money somewhere. You'll probably get stuck with some taxes when you start withdrawing but they really shouldn't be exorbitant as long as you don't withdraw all at once and you don't withdraw early. Also keep in mind that money being withheld for your 401k comes out pre-tax. So it's not like you're having to pay taxes twice, you're just deferring your taxes on that income (and the money that money makes) until a far later date.
I can't claim to be a financial expert at all, but it seems like everyone I've talked to, including reps at TIAACREF and Fidelity at my work, seem to think Roth IRAs are the best way to go when it comes to tax breaks later. Roth IRAs offer tax-free growth, meaning you don't pay taxes when you pull the money out later. The catch is that contributions to Roth IRAs are not tax-deductible. So if you use the standard deduction on your taxes, the Roth IRA is the way to go. If you itemize your deductions, you may need to take a closer look at a Traditional IRA.
Beyond that the only thing I really know about them that's all that good is that you can have the money taken out of your check every month instead of saving it yourself. Again, like slowdive said, good for people who suck at saving money themselves. I have friends who wouldn't save a penny if it wasn't for retirement withholding options like these.
You do need to save for retirement though, so put your money somewhere. You'll probably get stuck with some taxes when you start withdrawing but they really shouldn't be exorbitant as long as you don't withdraw all at once and you don't withdraw early. Also keep in mind that money being withheld for your 401k comes out pre-tax. So it's not like you're having to pay taxes twice, you're just deferring your taxes on that income (and the money that money makes) until a far later date.
I can't claim to be a financial expert at all, but it seems like everyone I've talked to, including reps at TIAACREF and Fidelity at my work, seem to think Roth IRAs are the best way to go when it comes to tax breaks later. Roth IRAs offer tax-free growth, meaning you don't pay taxes when you pull the money out later. The catch is that contributions to Roth IRAs are not tax-deductible. So if you use the standard deduction on your taxes, the Roth IRA is the way to go. If you itemize your deductions, you may need to take a closer look at a Traditional IRA.