Author Topic: Stupid Question... Why a 401K? Why not just something like a robo advisor thing  (Read 1375 times)

Stellar

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I feel silly asking this and I poked around the forums and could not find anything that directly discussed this.  Why do I put 15% of my income to my 401K instead of say 15% to a Betterment or Wealthfront type account?  I know there is Bloooom now, that ca automatically balance your 401K and that 401K is pretax plus the company match  but . . . why can't I just get my match which is closer to 6% to my 401K and put the rest somewhere else?

If both of these fluctuate with the market, isn't' the return the same?
« Last Edit: June 08, 2016, 11:53:22 AM by Stellar »

MDM

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I know...that 401K is pretax....

Annual earnings in your 401k also are not taxed.  You are taxed only when you withdraw.

In taxable accounts, you are subject to tax on annual earnings.