401(k) plans are better than IRAs
A workplace retirement plan is indisputably great. The employer often matches a portion of the employee's contribution, and fees may be lower than those in the open market.
But not all workplace plans are created equal. Some have inflexible rules regarding loans and withdrawals, and may have limited and expensive investment options. The simple fact is that the features of a 401(k) are dependent on the employer.
"The reality is that IRAs tend to offer more freedom, lower costs and simplification," says certified financial planner Jason Lina, CFA, lead adviser at Resource Planning Group in Atlanta.
"There are no hidden administration fees as with a 401(k), much greater investment flexibility and many options for pre-59 1/2 penalty-free distributions," he says.