IRA ‘Junk’ Bunk

 There’s a “new” retirement crisis to fret about — and it involves so-called “junk” IRAs.

You may have seen the recent Wall Street Journal’s headline that proclaimed “Forgotten 401(k) Accounts Are Costing Americans Billions in Lost Investment Gains.” This particular assertion turns out to be another spurred by (yet another) proclamation from an IRA provider (PensionBee), though this one at least doesn’t manufacture quite as ludicrous a compounding of the size and number of those accounts as others[i] have done.

More precisely, the issue they raise is that smaller retirement plan balances can, and often are, legally expunged from the plan of their prior employer into an IRA.  

Now, retirement plan professionals know how this works — those who sever (or who are severed from) employment with less than a $1,000 balance will likely have that distributed to them in cash, those with balances above $7,000[ii] will generally have the option to leave that balance behind,[iii] and those with balances in between those two figures … well, if the employee doesn’t make a separate election, their former employer has the option[iv] to distribute out these “small” balances to an IRA.

Not just any IRA, mind you — the law (ERISA) requires a review and selection process that the plan fiduciary must enter into a written agreement with the IRA provider that — among other things — addresses the investment of the rollover funds and the fees and expenses to be charged to the account. With regard to the former, the rollover funds must be invested in a vehicle “designed to preserve principal, and provide a reasonable rate of return, whether or not such return is guaranteed, consistent with liquidity,” such as money market funds, interest-bearing savings accounts, certificates of deposit or other “stable value products.” 

With regard to the latter, the fees assessed against the IRA cannot exceed the amounts charged by the IRA provider for comparable IRAs established for rollover distributions that are not automatic rollovers. Sound like “junk” to you?

Oh — and participants are required to receive notice of this. 

So, what’s the big deal? Well, to put a “face” on this crisis, the Wall Street Journal manages to find a person who admits that she was told about this when she left her job, but “busy with her new job,” didn’t do anything about it. Only to find out (much later) that the IRA balance declined during that period — because the return on that IRA ($6.98) was less than the fees in the IRA ($15). This individual now says she feels “duped” — because she missed out on market returns (24% that year,[v] according to the WSJ) while “busy with her new job.” 

Well, cry me a river. 

So — how are these “junk” IRAs costing Americans billions? PensionBee leans on data from the Employee Benefit Research Institute (EBRI) to say that “By 2030, 13 million accounts worth $43 billion are projected to be swept into Safe Harbor IRAs through automatic rollovers.” Now, considering the size of the overall retirement savings market, that’s not a lot — but it IS, at least the purported “billions,” and from a credible source.

ad space

But then the white paper that highlights the issue cautions about the “threat” posed by so-called “junk” IRAs — and by “junk,” they apparently mean IRAs other than the ones they offer.

Look, what this individual — and the “millions” of others like her — aren’t helped to appreciate by this article is that the provision here not only likely helped preserve their retirement savings, but spared them from paying the taxes and penalties that would have been assessed if they had simply taken that distribution in cash. Oh — and that they were told they had an opportunity to make a different decision, and just … didn’t.

That’s not the fault of the employer, the 401(k) plan, or the IRA she was invested in, despite the pejorative label a competing firm wants to apply to it.

The only folks being “duped” are the ones who fail to see what the real problem here is.

• Nevin E. Adams, JD

 

---

[i] See Talking Points: Third Time No Charm in ‘Forgotten Account’ Fantasy

[ii] Previously $5,000 – SECURE 2.0 increased that to $7,000.

[iii] Of course, those have wound up being described by another IRA provider as “forgotten.”

[iv] The WSJ article acknowledges that most employers do so since the cost to administer small-balance accounts generally drives up the plan’s administrative expenses.

[v] One wonders what she would have thought if that balance had been invested in something other than the conservative investments required by law during a bear market. Maybe relieved? 

What’s the Worst that Could Happen?

 Did you hear the one about how a rollover delay could cost you $76,000?

Hard to believe? Well, there’s a reason. To get to that number, the folks at PensionBee had to make not just one, but a series of worst-case assumptions. To get to $76,000, you have to assume:

• that you are waiting for a $100,000 check…
• that you get out of the market at exactly the wrong time — a low point right before an extraordinary market surge (that you miss, of course)…
• that continues unabated while you’re “out” of the market… (cause markets only go up)
  • oh, and you’re assumed to be out of the market for EIGHT WEEKS because it’s assumed that your rollover check got lost in the mail, and you had to have it reissued (during which, of course, the markets continue to rise)...
• Oh, and THEN you take that market uptick that you missed (cause, as we all know, markets NEVER go down)...
• 
  and then assume a 7% positive return thereafter on the money you missed (with fees of just 0.85%)… compound it for 30 years (because, apparently, you requested that distribution several decades ago… and voila! That rollover delay, compounded by a series of worst-case assumptions — well, at that point, it’s just math.

Now, that’s not to say it couldn’t possibly happen — but I think we can all admit it’s exaggerated for effect (clicks, anyone). In other words, it assumes the worst that could happen.

Roll ‘Plays’

Now, in fairness, at least PensionBee was honest enough to share their assumptions (and provide some alternate outcomes that were less severe). But, speaking from experience, the rollover process still…sucks. 

I actually contemplated rolling over my 401(k) accounts two different times over the years before the “finality” of retirement pushed me past my reluctance. Granted, in the 20-odd some years since I first contemplated (and struggled with) a rollover, things have improved (more on that in a minute). That said, EVERYBODY (and we’re talking three major 401(k) providers here) insisted on cutting a physical check[i] and mailing it to me (two checks, actually — Roths are distributed separately). 

Now, I don’t know about you, but mail service no longer seems to be as reliable as it once was. And the idea of checks of that size (and probably looking like checks) being dropped off in the mail — well, it gave me pause.[ii] Oh, I was “allowed” to pay a pretty significant premium for “expedited” delivery — but though we’re talking about rates in excess of what Federal Express or UPS might charge, we weren’t talking about delivery that was truly special. 

As it turned out, the checks did arrive (and yes, I paid the premium), leaving me out of the market for about a week. Mitigating that was that my chosen IRA provider allowed me to do a mobile deposit of those checks (Yay!), so at least I was spared the dilemma (and sleepless nights) of putting those in the mail…again.[iii]

Overall, I was pleasantly surprised at how much the rollover process has improved over the past 20 years. I was able to do it all without sitting on hold for interminable periods for the “next available operator” while listening to product pitches (or bad elevator music) — without talking to a single person, in fact, much less people from different firms (sending and receiving). 

I realize there is an opportunity for fraud with wire transfers — but surely no more than with the antiquated process of physically producing and dropping off checks with the United States Postal Service. And, honestly, what’s being charged for “expedited” processing (and with separate charges for Roth and non-Roth accounts) struck me as — well, excessive — certainly for what it seemed to provide (one hates to think of the non-special alternative).    

That said, the reality seems to be that our industry is (still) ever so much better at taking in money than in sending it “out.” Indeed, the cynic in me can’t help but wonder if that is deliberate. 

It may not be the worst that could happen. But there’s certainly room for improvement.

• Nevin E. Adams, JD

 

---

[i] That is, unless you want to roll it over to THEIR IRA — in which case, electronic transfer was an option.

[ii] During this process, one of the insurance checks related to my mother’s estate — that looked like a check — was “misdelivered” to the wrong house. Fortunately, I have honest neighbors.

[iii] The New York Times recently profiled the experience of a participant that was not so fortunate — though his check got to him, it was the forwarded checks to his IRA provider that got stolen. See https://www.nytimes.com/2025/05/17/business/paychex-401k-rollover-checks.html?unlocked_article_code=1.KE8.bOS8.VimnT7OedYLF&smid=url-share

‘Mad Money’s’ Mixed Bag

  Last week a reader brought to my attention an episode of Jim Cramer’s “Mad Money” — an episode wherein he referred to the 401(k) as a “mixed” bag. 

In it, he acknowledged the benefits of tax deferral, the benefit of compounding on returns, and — where it’s found, anyway — the “free” money of an employer match. In that, he was at least more honest about such things than many[i] who make their living offering investment advice (generally accompanied by a subscription fee to their services — which, to be fair, Mr. Cramer has and mentions in this show). 

In point of fact, Mr. Cramer would clearly prefer an IRA option — if the contribution limits were equal to the 401(k) — though they’re not even close (not to worry — he says he’s going to continue to fight to remedy that situation). Indeed, Mr. Cramer counsels that once you’ve gotten the full match in your 401(k), you should just put everything else into an IRA (though he doesn’t get into the “nuances” of contributing to both in the same year). 

But Mr. Cramer is also concerned about the “hidden” fees in a 401(k) — so much so that he counsels folks to “always” roll out of that 401(k) when they change employers. And little wonder — since he appears to think that your typical 401(k) is charging administrative fees in excess of 200 basis points — more than 2%, in other words. I’ve no doubt those can be found but would caution Mr. Cramer that those are not the “norm.”

That said, he told viewers they should be “skeptical” of a 401(k) plan that doesn’t let you buy individual stocks via a self-directed IRA — one that he maintains gives you “control” of your money. As he’s a stock picker (of sorts), it’s not surprising that he has an affinity for individual stocks[ii] rather than mutual funds (though he admitted that those who don’t have the time for the former might be well-served by investing in a low-cost index fund).

Indeed, as do most folks touting mass media investment advice, Mr. Cramer prefers the ability to go beyond the investment menu “constraints” of a 401(k) menu — and surely for individuals like him who have the time and expertise (or think they do) to make and track individual investments, that resonates.

Programs like “Mad Money” are ostensibly positioned for more experienced/engaged investors — though that did NOT seem to be composition of the callers to this particular episode. Just as well, because he wasn’t providing much more than high-level generic wisdom on basic tax deferral, compounding benefits,[iii] and a heavy dose of equities in your portfolio until you get to your 50s. 

The reality for most individuals, of course, is that without a workplace retirement plan, they don’t save for retirement, much less invest. The match may be “free” money for the individual, but it surely has a cost — one borne by their employer in support of their eventual retirement. The mutual funds Cramer rejects are — increasingly — a portfolio not only selected, but managed by professionals, either in a target-date fund or managed account. For most, it’s not “mad” money, after all — it’s about thoughtfully building a secure, reliable financial foundation.   

Those with “mad” money to spare might not need that kind of help — but plenty of “regular” people do.

• Nevin E. Adams, JD

 

---

[i] See Is the 401(k) Really a 'Horrible' Retirement Plan?, When You Assume, The 'Plot' Thickens

[ii] He did make an interesting argument for investing in stocks as a way to curb spending. Specifically, he noted that you’d have to sell your favorite stock in order to raise the cash to spend — and that you wouldn’t want to sell that favorite stock — so you wouldn’t spend the money.

[iii] One assumes that he’s more specific in his “investment club,” which came up several times during this program.

ERISA—Still ‘Nifty’ at 50

 I’ve long relished telling “newbies” to the retirement space that ERISA was the second big executive act of then-newly enshrined President Gerald R. Ford—less than one month after he took office. 

In fairness—and I’m not exactly a kid—I was barely out of high school when that event occurred.  I’ve never had a benefits program (retirement OR healthcare, and us retirement geeks tend to forget that ERISA also has sway over workplace health plans) that wasn’t operating under its auspices—and so, talking about what ERISA has done/changed requires going back before my personal experience. And yet, despite the disparaging acronym “Every Ridiculous Idea Since Adam,” what ERISA has accomplished—and what has emerged in its aftermath—seems truly remarkable to me. 

ERISA is, of course, the Employee Retirement Income Security Act of 1974—and on Labor Day 2024, that legislation will be 50 years young. Not that ERISA created either the concept or the reality of pensions and retirement plans; in fact, the former dates back to the time of the ancient Roman armies. But in America, the first private pension plan was that of the American Express Company in 1875—crafted in an effort to create a stable, career-oriented workforce. By 1899, there were (just) 13 private pension plans in the country.[i]

The reality is that employee pensions had very few protections under the law before ERISA—there were no rules around funding or protections for benefits if the plan sponsor went bankrupt or was sold. Many plans had long vesting schedules requiring as many as 20 to 30 years of service, some plans required employee service periods to be “uninterrupted,” and there were situations where companies reportedly terminated employees just a few months before vesting to avoid having to pay their pension benefits. 

Indeed, ERISA represented a major shift in attitude—inserting the federal government into an oversight role over what, until that point, had pretty well been left to the parties to the employment contract; employers, workers and unions. Perhaps most importantly, it established ERISA’s federal law preemption over what might otherwise have been a mishmash of state regulations and requirements.   

That said, ERISA did not require any employer to establish a retirement plan. It “only” required—and still requires—that those that establish plans meet certain minimum standards. However, the law did a number of things that we take for granted today. At a high level, it established federal standards for things like vesting, participation and eligibility. It established rules regarding reporting and disclosure about plan features, funding and investments to participants—and via mechanisms such as Form 5500, reporting to the government as well. It put limits on benefits—and gives participants the right to sue for benefits and breaches of their fiduciary duty under that law. 

Of course, ERISA wasn’t about making it easy—it was about making sure that the promises made to workers were upheld—and in that sense the EMPLOYEE retirement income security act was aptly named. The poster child for this undertaking was, of course, the bankruptcy (and discarded pension promises) of a major U.S. automaker[ii] (Studebaker,[iii] though arguably it was the assumed pension obligations of Packard that really did it in). And in that regard, SECURITY of those promises[iv] was paramount—it was about quality, not quantity—about ensuring that the promises made were promises kept.

Notably, ERISA established fiduciary duties for those managing retirement plans—requiring that fiduciaries act in the best interest of plan participants and beneficiaries. It laid the groundwork for a definition of fiduciary which would, a year later, find form in the so-called five-part test—which would hold for nearly 50 years.[v]

Has It Worked?

Has ERISA “worked”? Well, in signing that legislation, President Ford noted that from 1960 to 1970, private pension coverage increased from 21.2 million employees to approximately 30 million workers, while during that same period, assets of these private plans increased from $52 billion to $138 billion, acknowledging that “[i]t will not be long before such assets become the largest source of capital in our economy.”

As of the latest (2021) numbers available, that system has grown to exceed $13 trillion (and another $11.5 trillion in IRAs, much of which came from that private retirement system), covering nearly 100 million active workers (146 million in total) in more than 765,000 plans. Indeed, the Labor Department recently reported that plans disbursed $322.5 billion more than they received in contributions during 2021.

That said, the composition of the plans, like the composition of the workforce those plans cover, has changed significantly over time. While much is made about the perceived shortcomings in coverage of the current system, the projections of multi-trillion dollar shortfalls of retirement income, the pining for the “good old days” when (people act like) everyone had a pension (that never really existed for most), the reality is that ERISA—and its progeny—have unquestionably allowed more Americans to be better financially prepared for a longer retirement than they otherwise would be.

Fifty years on, ERISA—and the nation’s retirement challenges—may yet be a work in progress. But it’s hard to imagine American retirement without it. It is a rich legacy that we all benefit from today—and—with luck and the ongoing work to improve upon it—will—for decades to come.

Happy birthday, ERISA!

 

---

[i] Steven A. Sass, The Promise of Private Pensions, The First Hundred Years, at 9 (1997).

[ii] I’d wager that a majority of Americans have never even heard of a Studebaker, and the notion that a major U.S. automobile maker once operated out of South Bend, Indiana would likely come as a surprise to most. The Studebaker brothers (there were five of them) went from being blacksmiths in the 1850s to making parts for wagons, to making wheelbarrows (that were in great demand during the 1849 Gold Rush) to building wagons used by the Union Army during the Civil War, before turning to making cars (first electric, then gasoline) after the turn of the century. Indeed, they had a good, long run making automobiles that were generally well regarded for their quality and reliability (their finances, not so much) until a combination of factors (including, ironically, pension funding) resulted in the cessation of production at the South Bend plant on Dec. 20, 1963.

[iii] Roughly 70% of Studebaker’s workers were left without their promised retirement benefits after the South Bend, Indiana plant was closed in 1963. Of some 10,500 current and former employees in the pension plan, about 4,000 with more than 20 years of history at the company received only about 15 cents for each dollar they expected—roughly 3,000 shorter tenured employees got nothing.

[iv] It's been opined by some that ERISA was responsible for the decline of traditional defined benefit pension plans—and certainly the vesting standards, reporting scrutiny, funding standards and the pension insurance premiums from ERISA’s formation of the Pension Benefit Guaranty Corporation (PBGC)—all designed to forestall outcomes like the Studebaker bankruptcy’s impact on its workers’ pensions played a part. While ERISA’s transparency requirements—and those funding requirements—have certainly been economic factors, it seems more likely that wide swings in interest rates, the accounting rigor imposed by FAS 87, the benefit limits imposed—and the elevation of those liabilities on the corporate balance sheet were the real culprits.

[v] Though with litigation pending, the five-part test still lives!

Looking Before You 'Leap'

As new rules about rollover disclosures kick in, a new report highlights an often unacknowledged risk of rollovers—high(er) fees.

That’s right—a new report from Pew Trusts seems to have stirred up a new awareness of that issue—all this attention just as PTE 2020-02 brings the written requirement of why a rollover is in the best interests of participants into play.

That difference shouldn’t come as a surprise to anyone who has ever compared the fees in their 401(k) to an IRA. Most 401(k)s benefit from institutional pricing, and if the menu of available investment options isn’t quite as broad as that in an IRA, they benefit from the selection and monitoring by ERISA fiduciaries. Yes, IRAs are just that—individual retirement accounts—smaller, generally speaking with more options—and yes, much more likely to be charged retail mutual fund fees—more expensive. In that sense the report—though it’s garnered headlines of late—doesn’t really tell us anything we didn’t know, if we’d only stop to acknowledge it. 

However, sure as I am willing to accept the conclusions based on both personal experience and professional acumen, I am a tad skeptical in the results of the analysis. The title is truer than one might expect. The title of the report speaks volumes as it says: “Small Differences in Mutual Fund Fees Can Cut Billions From Americans' Retirement Savings.” Because, after all, it surely could—but does it?

The report that is garnering so much attention now claims that, in the aggregate, the amount of retirement savings lost in such rollovers potentially reaches tens of billions of dollars. Citing data from the Investment Company Institute, the report notes that in 2018 alone, investors rolled $516.7 billion from employer retirement plans into traditional IRAs. They go on to assert that an analysis of fee differentials suggests that over a hypothetical retirement period of 25 years, those retail investors could see an aggregate reduction in savings of about $45.5 billion—just from that single year of rollovers.

Math ‘Problems’

The analysis—based on data from Survivor-Bias-Free U.S. Mutual Fund Database, Center for Research in Security Prices—though it relies on medians and averages for its fee conclusions—and, based on those, it asserts that annual expenses for median retail shares (ostensibly what you’d have access to in an IRA) were 0.34 percentage points higher than those for institutional shares (again, ostensibly what you’d have access to via your typical 401(k). Similar projections are presented for hybrid, and for what the analysis purports to be the smallest median fee difference. Having chosen these points of reference, the analysis simply does the math.[i]

Rollover Rationales

Regardless of the size of the differential—what role, if any, do fees play in these rollover decisions? Suffice it to say—not much. 

At least according to another report[ii] published last September by Pew, based on a survey of 1,125 older workers and recent retirees ages 55 to 75 between May 12 and June 5, 2020—roughly half currently and the rest working full time, though all had at least $30,000 in retirement savings. The survey asked participants a series of questions about whom they had consulted in deciding what to do with their retirement savings and how they planned to handle their savings (in the case of those still working), or what they had done with their savings (in the case of retirees).

Now, there are many reasons underlying the distribution decision—fees, convenience, investment options—but when the workers weighed in they said they were most motivated to stay in their current plan because they preferred the investment options—a reason cited by 50% of respondents as the most important reason, and mentioned by nearly three-quarters (73%) as at least one reason why they intend to leave their savings in their current plan when they retire. Not surprisingly—since those surveyed had at least $30,000 in savings—more than half felt that staying in their current plan would be convenient.

On the other hand, only about 3 in 10 were motivated to plan on keeping their savings in their current plan because they thought it would have lower fees than other options, and a mere 15% said lower fees in their current plan was the most important reason for planning to leave their savings where they are.

‘Control’ Voice

Near-retirees planning to roll their savings into an IRA at retirement were similarly motivated by convenience and investment options, according to the report. However, the strongest motivating factor for those respondents was the ability to have greater control over their investments, with more than 6 in 10 (63%) saying that was one reason that they planned to roll their workplace savings into an IRA, while for nearly 4 in 10 it was the most important reason. Roughly a quarter said that investment performance was behind their plan to move their savings into an IRA when they retired, and the same number actually said it was because the IRA had lower fees. 

Control was most important among retirees as well; about 18% of retirees cited lower fees as a reason for rolling over their savings, slightly less than the 25% of near retirees who cited fees as a reason—more specifically that the IRA had lower fees than their current plan. Only 4% of retirees said it was the most important reason, nearly identical to the 3% of near retirees who said the same.

Said another way, fees were not a major consideration in the rollover decision—and when it did manifest itself as a reason, it was because the IRA fees were believed to be lower than their current plan. Which, again, in view of certain market realities, suggests that those workers didn’t appreciate/understand the fees paid in their 401(k).  

The reality is, a small difference in mutual fund fees can cut billions from Americans’ savings—an impact that, unfortunately, many of those contemplating a rollover may not realize[iii] or prioritize in their decisions. 

That said, while those new disclosures documenting why a rollover is in the participants’ best interest may not solve the problem—they should make it easier for advisors to help them better understand what they may be giving up. And perhaps all of this attention to this important issue will help participants who aren't working with an advisor to "look" before they simply leap... 

- Nevin E. Adams, JD

[i] While the comparisons are certainly “directionally” accurate assuming the math is correct, the size and scope of the impact surely suffer from the imprecision of the markers employed. But considering the sheer size of the rollover market (it now outpaces that of the 401(k), it’s surely a significant amount.

[ii] Pew Survey Explores Consumer Trend to Roll Over Workplace Savings Into IRA Plans

[iii] The Pew report notes that “although few said that they would continue a rollover into an IRA with higher fees than their workplace plan, previous research by Pew has shown that many people struggle to fully understand their investment fees. Just 25% of workers in an earlier Pew survey said that they had read and understood the fee disclosure of their retirement account. 

‘Might’ Makes… Wrong?

 Sometimes the motivations of those attacking the 401(k) are pretty obvious.

The most recent was an article by a Maurie Backman at the Motley Fool titled, “Why a 401(k) isn’t the wonderful savings tool you think it is.” I tried to ignore it when it first (to my eyes) appeared on Forbes (which seems to have a pretty low threshold for contributions these days), and I was no more inclined to read it when it showed up a couple of days later on Fox News. But then folks started sharing it on both LinkedIn and Twitter—some ostensibly to hold it up for ridicule,[i] others as an affirmation—and, with some reluctance, I finally clicked on the article. 

Oddly, considering the title (and, in fairness, editors have been known to tweak headlines such that they bear little resemblance to the article they are attached to), the article spent almost as much space outlining the virtues of the 401(k)—specifically that they are “easier to sign up for” than an IRA, and that they have (much) higher annual contribution limits, even for catch-up contributions.

So, what’s their beef(s)? Backman makes three points:

1. That investment choices in a 401(k) can be limited (specifically that you generally can’t buy individual stocks).
2. That fees in a 401(k) can be high (the issue here seems to be the inclusion of actively managed funds alongside index offerings—and an assertion that “401(k)s plan come with administrative fees that generally are not negotiable. The administrative fees you'll pay with an IRA are typically much lower”—an assertion that doesn’t align with my experience, but is offered without data).
3. That a Roth option isn’t guaranteed (this factual assertion despite the fact that the most recent data from the Plan Sponsor Council of America that more than two-thirds of 401(k)s do currently provide the option).

To sum up: According to the article that claims the 401(k) isn’t a wonderful savings tool, the suboptimal aspects of a 401(k) are: (1) the options might not include individual stocks; (2) the fees can be high; and (3) you aren’t guaranteed to have the ability to save for retirement on a Roth basis—even though, by the author’s own admission, 401(k)s have much higher contribution limits and are easier to access, and thus are much more likely to be used (recall that data indicates individuals are 12-15 times more likely to save in a 401(k) than in an IRA on their own). Oh—and there’s only a passing reference to the employer match, which arguably also isn’t “guaranteed,” but is certainly more likely to be found in a 401(k) than in a stand-alone IRA.  

Perhaps it should come as no surprise that an article penned by the Motley Fool—a platform that purports to help individuals make stock picks—thinks that you’d be better off utilizing a retirement savings plan[ii] that would more readily accommodate their services. 

Yes, sometimes the motivations of those attacking the 401(k) are pretty obvious. The motivations of those choosing to publish such silliness? Not so much.

- Nevin E. Adams, JD

---

[i] Memo to those who did—clicking on the article is the whole point; sharing it only exacerbates the problem.  

[ii] To add to the irony, the article sums up its advice thusly: “What you should do in that case is contribute just enough money to your 401(k) to snag your full employer match, if one is offered, but then put the rest of your savings into an IRA. Doing so could help you invest more appropriately, avoid high fees, and enjoy the perks of a Roth saving option.”