Should I Max Out My 401K? Part 2
401K plans have tax benefits over taxable accounts due to their contributions and gains being only taxed upon distribution. Having a lower tax bracket in retirement amplifies this tax advantage. Unfortunately the drawbacks of 401K plans are typically high fees and low performance (1 and 2). When factoring both the positives and negatives of 401K plans is it better to invest in a 401K plan or fund a taxable investment account. The ProFolio 401K calculator was designed to he