IRA vs 401k
I recently wrote a query for opinions about investing in my 401k vs an IRA and had little response. Thanks to Faisal for the lone advice, I questioned others in my company about the benefits of doing so. I was pointed to a fund with tremendous earnings vs the paltry 3.5%-4.2% of my 401k. Now I’ll be adjusting my 401k contribution to permit the maximum match possible, and then invest any difference into an IRA.
Filed under: 401k, IRA, Retirement —
Comments (2)
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I must have missed that first post!
Even though SMIAX has “trememdous” earnings, look carefully at that Morningstar graph. *Every* small-cap index fund has been performing well recently. SMIAX is trailing the index because of it’s relatively big 0.95% expense ratio. (Pink line vs. Red Line)
Now check out NAESX, with an expense ratio of just 0.23%. The pink and red lines are basically aligned. As always, past performance does not guarantee future results. I recommend setting up a good asset allocation using book like A Random Walk Down Wall Street.
I agree with the usual advice – 401k up to match, then credit card bills, then Roth IRA up to max, then back to 401k.
I thought the IRA gave up and made peace with the rest of the UK…