BILL'S ANSWER
Thank you for visiting Bills.com. Here is an answer to your investment question comparing a Simple IRAs to a 401k plan:
The major consideration is that under an IRA, you can place it anywhere and you can invest in any security or fund that you choose. In a company sponsored 401k plan, you are constrained to invest in funds that are offered under the company sponsored 401k plan.
If your company matches your 401k contribution, you will certainly want to max out your investment, at least up to the level of the match.
In a 401k plan, you can typically contribute up to $12,000 annually. In an IRA (individual retirement account) you can usually save up to $4,000 annually (although this amount limitation is rising).
If you plan on taking out the investments before retirement age, you will be penalized under the 401k (taxed at ordinary income), and you may be penalized under the IRA... you will want to get specific advice from a tax adviser or attorney.
I hope the information helps you Find. Learn. Save.
Best,
Bill
www.bills.com/
February 17, 2009
May 14, 2007
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