Hacker News Reader

Also make sure to change jobs every few years so you can move money from the 401k to an IRA without a tax hit. 401k's tend to suck - high fees, low returns, little competition. Most of the funds in your 401k are there because a fund salesman took an HR person out to a steak dinner.

When you change jobs, always move the 401k into an IRA and put the money into low cost ETFs.

View on HN

Unless you have enough income to be over the Roth IRA contribution limits and want to make yearly backdoor Roth IRA contributions (non-deductible traditional contribution followed by a rollover to a Roth IRA). If you have a traditional IRA there can be some tax complications due to the pro-rata rule. If any traditional contributions are instead in a 401k the conversion is a lot simpler, and tax-free.

The other way around it is to open an individual 401k if you have any self-employment income, but that involves a bit more paperwork than an IRA.

Reply on news.ycombinator.com