[squiffy]

A number of points. I will raise only 1 here for now. And post further replies later.

One difference would be the 401K deposit would reduce your taxable income in the year you make the deposit. Say your salary is 54K. BUt you elect to put 4K in the 401K. That year you are only taxed on 50K of income.

BUt I think the money then grows tax deferred, but is taxed at as income upon withdrawal. And the withdrawal terms may be different for 401ks and IRAs. We can easily look that up.

With the ROTH IRA you have more freedom to choose what investment vehicle you will use. You can go to any broker or bank that offers IRA custodianship and investments. WIth the 401K you are limited to the custodian selected by your employer.

With the Roth IRA, you will be taxed on 54K of income. SO the 4 K is taxed to you when you earn it.

You then deposit the 4,000 (after taxes) and it grows tax free until you withdraw, at which time all withdrawals are tax free.

You would have to do the math, but I would think that for most people tax free earnings and tax free withdrawal will put you ahead in the end. Though I am not sure.

If your account grows to $1 million dollars over 30 years and you can withdraw it all tax free, that would seem to be a good deal.