Interesting. Most companies nowadays offer a "Roth" option for 401(k) which takes contributions with after tax dollars so when you are ready to get your money back out at 59.5, all of the growth is tax free. You only have to pay taxes on what your employer matches.
For myself (young-ish, high-ish income) I've determined that Roth is a bad deal.
Conceptually, Traditional and Roth are about equal. Paying taxes now vs paying them in retirement is a wash, all else being equal. But with a Traditional 401(k), the tax savings are at my highest marginal tax rate. In retirement, I would not expect to be in the same tax bracket.
A Roth is a better deal than post tax investing. It's not either or depending on income.
The advantage of a Roth is that you control it and it isn't in expensive employer controlled funds. I say max out your Roth and then max out your 401k. If your spouse works, max out their Roth IRA as well.
Definitely take advantage of any tax incentives being offered over post tax investing.
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I misread. I would take the employer offered 401k with the 17.5k contribution limit. Get the money out there earning for you.
You can do your own Roth IRA. That is what I am talking about doing separate from your employer. I would max that out first assuming the funds are better.
I prefer today dollars (401k) over future dollars (Roth) so the 401k is more attractive to me modulo terrible fund selection.
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