What to Invest in FI Fund vs. IRAs (401k and Roth IRA)

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I remember when I first started working, my employer offered a 401(k), and I didn’t opt out because, as a fresh-off-the-boat first-generation U.S. immigrant, I had no idea what it was. Then I heard about the benefits of a 401(k), especially since employers often match a certain percentage of your pay, essentially providing “free money”. I began to invest in it. Why not, right?

When I set up the account for the first time, the brokerage asked me what I wanted to invest in. Faced with a long list of options with complicated asset names, I had no clue. I didn’t bother with annual returns, compositions, or management fees. Nope, I just went with the ol’ “Eeny, meeny, miny, moe” approach.

Looking back now, I wish I had spent more time researching and learning about finance.

I wasn’t the only one in that situation. In a 2023 survey conducted by CNBC Your Money, about 4 out of 10 survey respondents with a 401(k) don’t contribute anything to the plan. In another survey from 2023 by CNBC Your Money, almost half — 46% — of 401(k) investors don’t know what investments are in their workplace retirement plan.

If you work for a U.S. company, your employer may offer Individual Retirement Accounts (IRAs), such as 401(k)s and Roth IRAs. These accounts are designed to help you…