conversation: User (stayonthecloud): "I've been with my employer for four years. I didn't open a 401(k) because I was recovering from family problems that left me in a lot of debt.\n\nDuring this time, I put all my extra money into killing all my debt and creating a substantial emergency fund. I'm now debt-free (hooray!) and I have a six month fund (woo!). However, I live in an expensive area, am underpaid, rent's gone up, and it's difficult to save. With no matching at work, I haven't had an incentive to have a 401(k).\n\nI'm reworking my budget now that I feel able to start planning for retirement. I get nothing for having a 401(k) and I am not likely to stay more than two more years, so would it make more sense to just start a Roth? I am unlikely to afford more than $200 towards it a month, so there's no chance of maxing out any account."
  Self: "In your situation, Roth IRA seems like the best solution. ~~I would even recommend a traditional IRA before contributing to 401k if you by any chance maxed out your Roth.~~\n\nEdit: Thanks for the correction u/jenseits \n\nYou will typically have a better choice of available funds in both Roth and traditional IRA, that you will in 401k, and until you run into contribution limit problems, either is a better choice than an unmatched 401k. "
  Owenowbrowncow (Owenowbrowncow): "One can't assume you will have a better choice of funds. Yes you will be able to choose which fund company will manage it, but at the same time most IRA providers will only allow you to select from their fund family and there may be fund minimums ($500) that you have to meet in order to select multiple funds (as in a bond fund or international or large cap). Some fund companies may be really good at managing bonds (like PIMCO) but they may be lacking in the other fund types (like international or mid caps)\n\nYou could always go with a target date retirement fund or a lifestyle fund which is basically a mutual fund that contains usually 15 different types of funds ranging from international down to a money market fund. These type of funds basically give you a well diversified portfolio by owning that fund. "
  arichi (arichi): "&gt; One can't assume you will have a better choice of funds. Yes you will be able to choose which fund company will manage it,\n\nAnd if you choose a good fund company, you're fine.  Vanguard, Fidelity, and Schwab all are good choices for this."
  