Invest in Roth IRA or 401k - first job

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TigerDeBaiter

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Ditto.

Only going to reply because I was in your shoes at one point and it helped to hear many people reinforce what I later learned are the correct decision. Like the posters above said, employer 401k up to match then as much as you can to Roth IRA. Reasons: 401k more than likely has higher fees and less investment options. Roth IRA is also considered "more liquid" at the end of the day being able to withdraw principle at any point in time as long you meet a few criteria.

401k to Match
Emergency Fund
Max ROTH IRA
Max 401k

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401k to Match
Emergency Fund
Max ROTH IRA
Max 401k

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depending on income, this is what I would. I honestly dont believe they will keep Roth's withdrawls tax free over the long term, so I might go a little bit harder with 401k. Best thing to do is to have both IMHO.

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So you are saying I should have an Emergency Fund separate from my IRA contribution?
Say my income limits me to choosing between investing in my IRA or putting money aside in an emergency fund, which is the more beneficial option?
I have seen differing opinions on this board.

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Your ROTH IRA is retirement, not your emergency fund.
Everyone's personal finance choices are different - but what I personally did was:

1) 401k to Match
2) 3 Month Emergency Fund
3) MAX ROTH IRA
4) MAX 401k
5) Taxable Long Play Investments
6) Risky Play Investments (think penny stocks)

Depending on investment options, max out your 401k assuming you have a roth option in your 401k account. It will have the lowest costs most likely.

There are additional expenses with an IRA that probably aren't worthwhile when you are just starting.

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Can I set up a Roth IRA, say through Vanguard, that allows for direct deposit/contributions, or will I just have to make a manual lump contribution at some point during the year?

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Yes, and it's super easy.

I have mine set up to withdraw weekly. It's $105 and change. I feel that schedule makes contributing extremely "doable" "easy" whatever. It's the same amount in the long run, but a hundred bucks a week is like going out to nice (not even that nice) dinner once a week. It helps to put it in perspective and prioritize your spending.