there are both upside and downside for 401 K.
upside: high limit, you can contribute up to 16500 to 401K. For IRA, the
limit is only 5000.
downside: lots of hidden fees, it is particular bad for small business. The
fee is 3% for small companies. It is way too high. The details of the 401k
Plan is determined by your employer. You have no say in it even if you are
not happy with it. you can transfer IRA accounts freely. You know how much
fee you pay.
my suggestion: make your contribution in the following order
1. get full match from your company.
2. contribute to IRA accounts to limit
3. if you still have money to invest after the above two, look at the fee in
your 401k plan (the fee disclosure act takes effect this year, you should
be able to know the fee) and whether a low-cost index fund is available in
your plan. It is possible that a taxable account performs better than 401k
if 401k does not offer low cost index funds and charge high fees.
for spx, as far as I know, VOO by vanguard has the lowest expense ratio (0.
06%). I have a position of VOO in my IRA account.
