Roth 401(k) vs brokerage account

[Derek Zeigler]

Alright so What is the benefit of contributing to a Roth 401K vs self investing in a taxable account granted you have the discipline to invest. I am looking to invest more in RE and like the liquidity that a non 401k provides if I were to want it to put into a deal. I may be looking at it wrong but a 401K seems great for people to start with and for people not financially disciplined to actually save that money once they get it. Let me hear your thoughts.

About me: 31 yrs old, married with 1 child. net worth about $500K with just over $300K in investments. Max out roth 401K and roth IRA for last 2 years, Total income last year $176,000

[Ryan Allen]

@Derek Zeigler

The benefit is the tax advantage nature of the Roth 401k. Your gains and withdrawal are both tax free. Very substantial benefit in the long run.

You do have more liquidity in a brokerage account. With the 401k, your best liquidity option is to take a loan against your 401k. You also could look at taking a hardship withdrawal due to the CARES Act if you wanted a lump sum now. I am currently looking into this. Note that company contributions are traditional contributions. So if you were to withdraw, it may be better to withdraw and pay tax now on those contributions vs the tax free money, given that tax rates are “low” and the market is at lower levels.