What are my tax-advantaged investment options at a university job?
"Yes. Two years after your first contribution to the SIMPLE IRA, you can roll it to a traditional IRA.  You can still contribute ""pre-tax"", but the mechanism will be slightly different, since with an employer plan the contribution was automatically deducted from your paycheck.  With an individual plan, you make the contributions yourself and then get a tax deduction when you file.  Since contributions to traditional and Roth IRAs combined are capped at $5,500 if you're under 50, some sort of employer-sponsored plan might be better from a contribution standpoint. If your institution offers some sort of plan other than a 401(k), you might still want to roll to a traditional IRA, since you will have much more flexibility in the investments you choose. On the flip side, if that thought is overwhelming, having a smaller set of options might be better for your peace of mind."
Did you read what I wrote? I sold some stock for a gain, that's a taxable event.  Are you trying to say I just shouldn't have sold it? Do you understand investing at all?   And the second point is moot, I still had to pay the tax, having write offs doesn't change the fact that my taxes were higher(more importantly that they would have been much higher if I couldn't take advantage of capital gains.) "Congratulations on the job offer!  That type of matching sounds good if you plan to stay at a company for more than a year. My experience has been that 401k matching can range from 2% up to 8% for your typical starting job, so a total of 6% is good. You would definitely want to contribute at least 5% to take advantage of the ""Free"" money. Loan provision could mean that loans from 401k are allowed. I did some research and found that not all company 401ks allow for you to take a loan out of your 401k. Typically this is bad practice since you are robbing your 401k of it's major advantage - tax free compound interest.  Source" Five years is too short to be able to safely invest the money in any productive manner. You're saving, not investing. Part of the problem is that you don't have all the money right now, and you'll need to add to it over the next few years until you have enough for a down payment. See the notes under CDs and bonds below for why this is a problem. The universe of options: As for the Roth, as duffbeer703 said, I'm not sure it's worth the hassle and risk that you'll want the money sooner and be forced to wait. (E.g. you end up with enough money in 4.25 years for a house that you want but you have to wait 9 months to be able to tap the Roth.) As noted above, the yields are so low that the losses to taxes aren't really going to amount to much. On $10k you're looking at $150 max earnings, and losing maybe $40 of it to taxes (annually). So avoiding taxes won't shrink your time horizon by any meaningful amount. I'd just open a high yield savings account and start dumping money in. Keep an eye on shorter term (1yr) CD rates and if they go above the savings yield and the timing is right then take advantage of it. "A TFSA is a tax free savings account.  It is a type of account where you can buy various investments like stocks, bonds, or funds (mutual, exchange traded, and money market).  There are some other options but it's best to see what your bank or broker will allow. You probably specified the type of investment when you opened the account.  You can look at your statements or maybe online to see what you're invested in.  My guess is some kind of HISA (high interest savings account).  This is kind of the default option for banks. The government created these accounts for a variety of reasons.  The main stated reason was to encourage people to save.   Obviously they also do things to get votes.  There was an outcry after the change to a type of investment called ""investment trusts"".  This could be seen as a consolation prize.  These can be valuable to seniors for many reasons and they tend to vote more often.  There was also an election promise to eliminate capital gains taxes in some fashion. It's not profitable for the government, in fact it supposedly cost the federal government $410 million in 2013.  Banks make money by investing your deposit or by charging fees. You can see what every tax break 'costs' the government in lost revenue here http://www.fin.gc.ca/taxexp-depfisc/2013/taxexp1301-eng.asp#toc7" Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive.   You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere.  But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds).  You've only got 30% invested in the more aggressive investments that you seem to be looking for.  If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year.  In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education. One big advantage that the 529 plan has is that most operate like a target date fund. As the child approaches college age the investment becomes more conservative. While you can do this by changing the mix of investments, you can't do it without capital gains taxes. Many of the issues you are concerned about are addressed: they are usable by other family members, they don't hurt financial aid offers, they address scholarships, they can be used for books or room and board.  Many states also give you a tax break in the year of the contribution. "Your employer could consider procuring benefits via a third party administrator, which provides benefits to and bargains collectively on behalf of multiple small companies.  I used to work for a small start-up that did exactly that to improve their benefits across the board, including the 401k.  The fees were still higher than buying a Vanguard index or ETF directly, but much better than the 1% you're talking about.   In the meantime, here's my non-professional advice from personal experience and hindsight: If you're in a low/medium tax bracket and your 401k sucks, you might be better off to pay the tax up front and invest in a taxable account for the flexibility (assuming you're disciplined enough that you don't need the 401k to protect you from yourself).  If you max out a crappy 401k today, you might miss a better opportunity to contribute to a 401k in the future.  Big expenses could pop up at exactly the same time you get better investment options.   Side note: if not enough employees participate in the 401k, the principals won't be able to take full advantage of it themselves.  I think it's called a ""nondiscrimination test"" to ensure that the plan benefits all employees, not just the owners and management.  So voting with your feet might be the best way to spark improvement with your employer.  Good luck!" I was thinking to do mix of ELSS and Tax Saving FDs. But is my choice correct? Also what other options I am left with? This depends on individual's choice and risk appetite. Generally at younger age, investment in ELSS / PPF is advisable. Other options are Life Insurance, Retirement Plans by Mutual Funds, NSC, etc