r/FinancialPlanning 1d ago

Putting money in 401k with very limited investment options vs buying etfs in brokerage account.

I work for a company that gives 3% of our salaries into 401k whether I contribute to 401k or not. I am in my late 30’s and I have been maxing out for most last 5 yrs. The investments in 401k are not cheap. The cheapest and only option we have is Fidelity Total stock market fund. The rest are target funds which i have no interest in it. Does it make sense to just put that savings into brokerage account and use ETF like SCHG and save there instead of contributing to 401k? I understand the tax benefits of 401k but thinking getting better returns and better options to invest might offset the tax benefits.

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u/Big_Breath_2561 1d ago

It’s going to be hard to beat the tax benefits provided by a 401k.