If you earn 10000 and put it in a taxable account. That money will be taxed at some double digit tax rate (I am assuming). I am going to take a stab that this is 20% or more. I'll use 20%. You have to use the top marginal tax rate since that is what you would not pay in a 401(k). If you earn 10000 and put it in a 401(k), that money is not taxed at the same tax rate, but you might pay a fee vs vanguard or something.
Ok so lets consider 2 situations.
1. 10000 -> 8k and invested for 30 years , growing at 7% each year: (10000*.8)*1.07^30 = 60898
2. 10k invested for 30 years but subject to a .35% fee, and growing at 7% a year: (10000)*(1 + 0.07 - 0.0035)^30 = 68996.2986822
So, suffice to say, something like a 0.35% fee isn't as important as the saving you get from taxes.
Some considerations.
- To do this properly you would have to simulate continuous contributions and not a single lump sum
- With more time, the less important the tax benefit is, but I substituted 30 years for 60 years and still got a benefit of the 401(k) with the fee
- Not factoring the HSA, employer match, or taxes. These could really tip the scales. Then again not factoring in the increase in salary
- 7% appreciation is inflation adjusted. Still a big assumption. I actually suspect future appreciation, at least for the next 10 - 15 years, to be lower. After that it is anyone's guess. Lower appreciation means the fee is greater.
Me personally. I think that apples to apples the 401(k) alone is ok. Factoring in the taxes, lose of employer match, and loss of HSA, is a different story. Compounded these aleast cut in half the increase. There are some other factors to consider such as quality of job, career aspirations, scenery, quality of location, etc. etc.
If I were you , I would still consider my options but also see if you can negotiate better benefits. Getting an HSA, moving to Fidelity or Vanguard, and maybe getting a match changes things a LOT.