Employer 401K thru Fidelity - Investment options
"The best predictor of mutual fund performance is low expense ratio, as reported by Morningstar despite the fact that it produces the star ratings you cite. Most of the funds you list are actively managed and thus have high expense ratios. Even if you believe there are mutual fund managers out there that can pick investments intelligently enough to offset the costs versus a passive index fund, do you trust that you will be able to select such a manager? Most people that aren't trying to sell you something will advise that your best bet is to stick with low-cost, passive index funds. I only see one of these in your options, which is FUSVX (Fidelity Spartan 500 Index Fund Fidelity Advantage Class) with an exceptionally low expense ratio of 0.05%. Do you have other investment accounts with more choices, like an IRA? If so you might consider putting a major chunk of your 401(k) money into FUSVX, and use your IRA to balance your overall porfolio with small- and medium-cap domestic stock, international stock, and bond funds. As an aside, I remember seeing a funny comment on this site once that is applicable here, something along the lines of ""don't take investment advice from coworkers unless they're Warren Buffett or Bill Gross""." The target date investment will automatically reduce equity exposure and increase bond exposure as it approaches retirement date.  If you are unlikely to make adjustments as you get older, you may be setting yourself up for more risk down the road.  Only you can decide what level of risk you can tolerate as you chase higher gains.
"Assuming you are below retirement age, you typically cannot roll money from a Roth IRA into a 401k nor transfer money out of a 401k until you leave the company. Your best bet is to leave your exising roth ira separate from your 401k.  A good strategy for retirement accounts is whenever able (typically when you switch jobs) roll your 401k into a ""rollover IRA"" (not a roth).   Then you can manage your investments with more options than the 5-20 funds provided in the 401k.   I would recommend against rolling funds into a 401k because of the lack of options in most 401k plans. Also, 401k is pre-tax and Roth is post-tax.   Pre and post tax investments don't mix before withdrawal unless you do a conversion of some kind." "403b plans are used by school districts, colleges and universities, nonprofit hospitals, charitable foundations and the like for their employees while 401k plans are used by most everybody else. I would suspect that a school district etc can use a 401k plan instead of a 403b plan if it chooses to do so, but the reverse direction is most likely forbidden: a (for-profit) company cannot use a 403b plan. One difference between a 403b plan and a 401k plan is that the employer can choose to offer, and the employee can choose to purchase, stock in the company inside the 401k plan. This option obviously is not available to charities etc. which don't issue stock. Your comment that the 403b plan invests solely in (variable) annuities suggests that the plan administrator is an insurance company  and that the employer is moving to more ""modern"" version that allows investments in mutual funds and the like. Forty years ago, my 403b plan was like that; the only investment choice was an annuity, but some time in the 1980s, the investment choices were broadened to include mutual funds (possibly because the 1986 Tax Reform Act changed the rules governing 403b plans).  So, are you sure that your employer is changing from a 403b plan to a 401k plan, or is it just a change of 403b plan administrator from the insurance company to another administrator who offers investment choices other than an annuity? Note, of course, that insurance companies have changed their options too. For example, TIAA (the Teachers' Insurance and Annuity Association) which was the 403b plan administrator for many schools and colleges became TIAA/CREF (College Retirement Equities Fund) where the CREF mutual funds actually were pretty good investments." Basically, no. You have retirement plan options and can either go with a Roth option, which won't change your current tax burden, or go with a traditional plan, which is tax deductible  but won't change your business deductions or self-employment taxes. This article has an explanation of options for setting up SEP or Solo 401k plans. Key quote for all the pre-tax retirement plans: Because pre-tax employer and employee contributions are deducted in   the same way, neither one is more tax-efficient than the other. The article goes on to say that if you were an S Corp or LLC that elected to be taxed as an S Corp, a Solo 401(k) plan would allow the business to make an employer contribution to your 401(k) and even then there's no tax advantage to the employer contribution. Conclusion for S-corps: [Employer contributions] would reduce the amount of income from the S-corporation that   would be passed through to you as the owner, thereby reducing your   income tax. But, because this income is not subject to payroll taxes   in the first place, these contributions will not reduce your payroll   taxes. While tax deferral is a nice feature, the 401k is not the Holy Grail.  I've seen plenty of 401k's where the investment options are horrible: sub-par performance, high fees, limited options.   That's great that you've maxed out your Roth IRA.  I commend you for that.   As long as the investment options in your 401k are good, then I would stick with it. You are in the perfect window for making an IRA contribution. The IRS allows you to make IRA contributions for last year until tax day. So you know that for 2014 you didn't have access to a 401K at work. You want to avoid making a deductible IRA contribution for this year (2015) until you are sure that you wont have a 401K at work this year. Take your time and decide if the detectible IRA or the Roth works best for your situation. Having a IRA now will be good becasue you have many years for it to grow. Keep in mind that it is not unusual to have multiple retirement accounts: Current 401K; rolled over into a IRA;  Roth IRA... Each has different rules, limits, and benefits. There is no reason to pick one way of investing for retirement becasue you never know if the next employer will have the type of plan you like. I am assuming that your spouse, if you are married, doesn't have access to a 401K; otherwise you would have to consider the applicable limits. "Another option you might consider is rolling over some of that 401K balance into a self-directed IRA or Solo 401K, specifically one with ""checkbook privileges"". That would permit you to invest directly in a property via your IRA/401K money without it being a loan, and preserving the tax benefits. (You may not be able to roll over from your current employer's 401K while still employed.)  That said, regarding your argument that your loan is ""paying interest to yourself"", while that is technically true, that neglects the opportunity cost -- that money could potentially be earning a much higher (and tax-free) return if it remains in the 401K account than if you take it out and slowly repay it at a modest interest rate. Real Estate can be a great way to diversify, build wealth, and generate income, but a company match and tax-free growth via an employee sponsored retirement account can be a pretty sweet deal too (I actually recently wrote about comparing returns from having a tenant pay your mortgage on a rental property vs. saving in a retirement account on my blog -- in short, tax-free stock-market level returns are pretty compelling, even when someone else is paying your mortage). Before taking rather big steps like borrowing from a 401K or buying a rental property, you might also explore other ways to gain some experience with real estate investing, such as the new crop of REITs open to all investors under SEC Reg A+, some with minimums of $500 or less. In my own experience, there are two main camps of real estate investors: (1) those that love the diversification and income, but have zero interest in active management, and (2) those that really enjoy real estate as a lifestyle and avocation, happy to deal with tenant screening and contractors, etc. You'll want to be careful to be sure which camp you're in before signing on to active investment in a specific property." Question: My job that I've been with for 2 1/2 yrs offers a 401k, but doesn't match. I have an account, but it's still sitting with my old employer. The fact that my new job doesn't match and how I've heard so many mixed things about 401k has lead me to not signing up. I'm 40; I need to be doing something to save for retirement. Any advice would be appreciated. Should I invest in 401 anyway or put the money I was going to put in there someplace else? If someplace else, where? Also who would I talk to about money someplace else. I, admittedly, am really bad about all of this stuff, but need to change. My wife and I make 100k combined and should be getting things more together for our future. She has a 401k going, but that's about all we have. Thanks again Another option to a human advisor is FutureAdvisor, a web service that (if it supports your 401k plan) gives personalized algorithmic advice on what you should hold in your 401(k) and other retirement accounts.  If it doesn't support your 401(k) plan just yet you can sign up to be emailed when your plan is added.  [Disclosure: I work here, but I believe in the product and it's designed to solve this exact problem so I'm mentioning it here]  Note from JoeTaxpayer - bolu's disclosure is much appreciated. The fee is $39/yr, with a free trial. Consider that a commissions based advisor won't even take on a $10K level account, and at $100K, you'd be hard pressed to gain by more than his 1% fee. So while I've not dug deeper into this site, a rules-based methodology is likely to be worth the cost if over time it gains you even a fraction of a percent compared to what you'd have done blindly.