Have to differ, there. Vanguard Index Funds of course are the best store of money. But I'd say often the best solution is forgoing the government vehicles, whic

Have to differ, there. Vanguard Index Funds of course are the best store of money. But I'd say often the best solution is forgoing the government vehicles, which effectively make your funds illiquid for decades for questionable benefit. Why? 401ks (non-Roth) are not tax-free; they're tax deferred. Which is a big difference. When you withdraw from them when you're retired, you pay income tax on them. The relevant measure then is how your marginal tax rate while working in 2013 compares to the marginal tax rate in 2050 when retired (or whenever). This is hard to calculate, but consider: 1) If you're putting in 16k/year over 40 years, you almost certainly will be hitting the top marginal tax rate.just from the required disbursements. 2) Do you expect income taxes will be higher or lower in 2050 than in 2013? Particularly note: if lots of people are using 401ks, which they are, 401k income's gonna be one pretty honeypot that can be easily hit by increasing the income tax, which already exists and would just need a rate tweak. Compare it to the alternative: invest the money outside of government vehicles, ideally in Vanguard index funds. Then you pay two taxes: the initial one on income (which is your average tax rate, not your marginal which is typically significantly higher), and the long term capital gains rate (which is much lower than either the marginal or average income tax rate). You can totally ignore capital gains if you're using Roth. Whether that is better than the 401k alternative by itself depends a lot on the particularities of your financial situation. But even for those for whom a 401k might theoretically make better financial sense, I'd argue that the greatly increased flexibility is worth the minor extra cost you might pay.