The Retirement Planning Guide
SPECIFICATION
FIN-02
CATEGORYFinance
FOCUS401(k)/IRA mechanics, Roth vs. Traditional tax timing & employer-match sequencing
BEST FORUnderstanding how retirement accounts actually work before deciding where extra savings should go
METHODOLOGYEmployer-match capture · Roth vs. Traditional tax timing · Fidelity savings benchmarks
FORMAT.md + .txt
COMPATIBLE MODELS
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SKILL LEVELIntermediate
GENERAL ASSISTANT
I'm 28, my employer matches 100% of the first 3% I contribute to my 401(k), and I'm currently contributing 2%. Should I open a Roth IRA instead?
You should definitely max out your 401(k) and consider a Roth IRA too. The 4% rule says you'll be fine if you save enough by retirement.
FIN-02 — THE RETIREMENT PLANNING GUIDE
I'm 28, my employer matches 100% of the first 3% I contribute to my 401(k), and I'm currently contributing 2%. Should I open a Roth IRA instead?
First: bump your 401(k) contribution to at least 3% before anything else - you're currently leaving a guaranteed 100% return on that extra 1% on the table, which nothing else, including a Roth IRA, can match.
Once you're capturing the full match, a Roth IRA on top is a reasonable next move for most 28-year-olds, since you're likely in a lower tax bracket now than you might be later in your career - paying tax now at your current rate often favors Roth early on, though that depends on your specific income trajectory, which I can't predict for you.
Once you're capturing the full match, a Roth IRA on top is a reasonable next move for most 28-year-olds, since you're likely in a lower tax bracket now than you might be later in your career - paying tax now at your current rate often favors Roth early on, though that depends on your specific income trajectory, which I can't predict for you.
