A Roth vs. 401K. Who wins? Surprisingly, neither! That's right, they both lose, and for different reasons. Consider this, investment in either a Roth or 401K, you are still the same problem: contribution limits. This is a real problem because it limits how successful you can simply save money. It encourages you to chase higher investment and higher yields, because you will eventually "cap-out" on your contributions.
But some problems are different. For example, if you plan well, then a traditional 401K, you have to pay back more taxes than you saved. Forget the employer match for a moment. Concentrate on one of the "truths", which hammered into your subconscious for a moment. What do we constantly hear about the retirement? We hear that we are in a lower tax bracket. Think about that for a moment. If this is true, and it could be, if you do not save very much money, it means that you make less money than you are. Factor for inflation and it is not a pretty picture.
What I'm trying to say in plain English is that if you are in a lower tax bracket, it is because your broke! Would you like to be poor in retirement?
The other "strategy" is to use a Roth IRA. The Roth is an interesting creature. It allows you to contribute after-tax dollars in exchange for tax-free retirement income. What is wrong? Well, there's nothing wrong with this approach, except that in the originally noted the contribution limit restricts your ability to save money in Roth On. Added to that, if you plan on the success during your working years, you never see, a Roth in your retirement dreams, because you will not be allowed to use that (because of income restrictions).
Roth vs. 401K debate is really on the government-sponsored retirement plan is the best. What about non-government sponsored plans? What is it with a good cash-value life insurance? Life insurance? YES. You see, I get a lot Flack about this, especially from people who do not know what they're talking about (they are not in the industry), but a good, properly structured insurance is cheap to own and be able to help you a reasonable yield of around 5% - 7%. In fact, even if the life insurance is not an investment, it can bring investments back-art supplies.
As DALBARinc.com, most investors earn less than about their life, I would say that's a good bet, especially since depending on your insurance, cash values can be guaranteed.
There is also no contribution limits for insurance policies, and it is no early withdrawal penalties. Life was around long before Roth and has always offered tax-free access to cash values, so that you can achieve an income that you do not have to work and can not survive.
Finally, many big banks and life insurance companies use as a way to secure money for conservation or as a way to key employees. For example, William Ryan of TD Banknorth has a cash value policy, which is paid for by the company ... its annual premium? $ 1,260,000. I bet he have a nice retirement.
Successful people use life insurance. Go figure.
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