Question

1 one of your friends heard about this annoying friend a teacher you had back in high school. they recently got a salary job that offers a 401k and you had some info about retirement accounts. what would you tell them?
a) invest in a 401k first if you have a company match. then contribute to your roth ira. if you want to save more after that, put money into your 401k.
b) max out your roth ira first. if you want to save more, invest in a 401k only if they have a match.
c) you are too young to save for retirement and not enjoy what life offers. wait until you get married and hope your partner is wealthy.
d) max out your roth ira first, then if you want to save more, invest in a traditional ira.

Explanation:

The optimal retirement savings strategy prioritizes free employer matching funds first, as this is a guaranteed 100% return on investment. After securing the full 401(k) match, a Roth IRA is the next best choice due to its tax-free qualified withdrawals in retirement. Any additional savings can then go back to the 401(k) to maximize tax-advantaged retirement contributions. The other options either prioritize sub-optimal accounts first, ignore free matching funds, or promote poor long-term retirement planning habits.

Answer:

A. Invest in a 401k first if you have a company match. Then contribute to your Roth IRA. If you want to save more after that, put more into your 401k.