I would get $692 in my 401k for the net take home difference of $421 per paycheck.
This says it all. Saving in a 401k gives you more money to invest now. From your post, it sounds like you have some misconceptions about 401k plans.
But that would leave me very little to apply towards my VFINX.
You should be able to invest in VFINX or an equivalent index fund using the money in your 401k. You simply get to buy more if you use your 401k account because you buy with pretax dollars. The VFINX in your 401k also supports a 4% withdrawal for life.
why would I need a robust 401k to kick in when I turn 60?
401k accounts are not locked boxes that are inaccessible until you turn 60. For example, you can convert a 401k to a ROTH IRA and then after 5 years withdraw the amount converted tax and penalty free. You could do this at age 30 and have access to your money at age 35. Search ROTH ladder on the forums to learn more.
Having a good tax strategy is one of the most important things you can do to accelerate your FIRE date. Take some time to run the numbers and talk to someone you can trust about minimizing taxes.