401(k)s are one of the most powerful retirement investing instruments in the US, with multiple tax benefits, free money from matching employer contributions, and considerable annual contribution limits. You can even start withdrawing funds penalty-free starting at the age of 59 ½.
However, financial guru Dave Ramsey had stated in an explainer on his website that simply investing in 401(k) might not be enough amid rising inflation and living costs. Ramsey believes that a 401(k) could fall short in retirement if the investments are weak, high expense ratios cost you significantly in fees over decades, as well as the absence of a Roth individual retirement account (IRA).
