Retirement

Should I contribute to my 401(k) before investing elsewhere?

Once you're ready to invest for retirement, the question isn't just how much — it's where the next dollar should go first. The order usually matters more than people expect.

Start with the match

If your employer offers any match on your 401(k) contributions, that's usually the first place your money should go, at least up to the amount needed to capture the full match. It's an immediate, guaranteed return that's hard to find anywhere else.

What to weigh after the match

Beyond the match, the choice between contributing more to your 401(k) versus investing elsewhere — a Traditional or Roth IRA, or a regular brokerage account — usually comes down to investment options and control. A 401(k) is typically limited to a short list of funds your employer chose; an IRA or brokerage account gives you the whole market to choose from.

Don't ignore high-interest debt

If you're carrying high-interest debt — credit cards especially — paying that down usually beats investing further, since the interest you're paying is often higher than what you'd reasonably expect to earn in the market.

Get the full picture

It's easier to decide where the next dollar should go when you can see everything at once. A free tool like Empower's dashboard links your 401(k) and other accounts so you're looking at one picture instead of guessing.