Readjust my 401k contributions to fund an IRA?

[Cool Friend]

I had been prioritizing paying off my debt, which I achieved this summer, while contributing to my company's 401k at 10%.  The company only matches up to 3% (with an additional 3% bonus at the end of the year), but at the time I wanted to take advantage of the pre-tax dollars so I thought it was a good idea to contribute more than the match.

The investment order recommends maxing an IRA before maxing the 401k past its employer contributions, though. So should I dial down my 401k to 3% and use the difference to fund an IRA?  My salary is 60k.

I'm sure this question has been asked a million times but I was having trouble finding another thread about it, so I apologize for the redundancy.

[terran]

The reason the investment order recommends funding an IRA before maxing out a 401(k) is because employer plans sometimes (often?) have inferior investment options to what would be available in an IRA at many providers (Vanguard, Fidelity, Schwab, Etrade, TD Ameritrade, etc), so it works well as a catch all. However, this isn't a universal truth. If your investment options are as good as or better than the options available at those places you then sticking with your 401(k) is just fine.

[EvenSteven]

+1 to what terran said.

In addition to limited investment options, many 401k/403b plans also have higher administrative fees. For example mine at TIAA has great investment options with low cost Vanguard funds, but it also has a 0.4% wrap fee.

One aspect, which may not be relevant to you, is keeping the back-door Roth option open in the future by not having any pre-tax traditional IRA contributions.

[Cool Friend]

Ahh, thank you both very much, makes total sense.  I'll compare IRAs to what my 401k option is and see which would be best.

[dandarc]

Also - if you've been paying down debt in addition to the 10% to the 401K, seems like you should be able to redirect the "paying down debt" money to an IRA. You have until April 15th 2020 to fund that 2019 IRA if the concern is "I only have 4 months!"