Share your insights or perspective on the financial matter presented in the input.

Should you always max out contributions to your 401k?
Definitely not.  You are too young.  Let me explain: Your money will be locked up for at least 40 years, and you will have to navigate some really quirky and trap-laden rules in order to get money for simple things.  Let's say you want to buy a house.  You won't be able to leverage the 401K for that.  College Tuition?  Limits. Your money is locked in and you may get some match, but that assumes your smartest decision at your age is to save money for retirement.  At your age, you should be investing in your career, and that requires cash at hand.  If you want to withdraw early you pay more of a penalty than just the tax rate.   Put differently: investing in your human capital, at a young age, can yield stronger results than just squirreling money.  I'd say don't worry until you are 30. BTW: I'm 24 now.  I used to save money in a 401K for a few months, before I understood the rules.  Since then, I decided against 401K and just saved the money in a bank.  After a few years, I had enough to start my business :)  the 401K couldn't give me that opportunity. Further Explanation: I am in the NYC area.  Many of my friends and I had to decide between living in manhattan or choosing to live in the outer boroughs or NJ.  One thing I noticed was that, while the people in manhattan were burning much more money (to the tune of 1500 per month), they were actually much more productive and were promoted more often.  Having lived in brooklyn and in manhattan, even though it is less expensive, you actually lose at least an hour a day thanks to the commute (and have to deal with crap like the 6 train).  Personally, after moving in, I invested the extra time in myself (i.e. sleeping more, working longer hours, side projects).  Now, when all is said and done, the people who decided to invest in themselves in the short term are financially more secure (both job-wise and economically, thanks to a few bonus cycles) than those who decided to save on rent and put it in a 401K. As far as the traps are concerned, my dad tried to take out a student loan and was denied thanks to a Vanguard quirk which didnt allow more than 50K to be borrowed (even though the account had over 500K to begin with).