[ygjb]

Not American, but as I understand it, 401k's are tied to your employers 401k implementation and while you are employed you have little choice in how the funds are managed. If you are contributing to a third party managed fund (employer or otherwise) that is not being matched, then you are ceding control of your retirement funds for no practical benefit. You would be better off putting your savings into another tax shelter appropriate to your needs that you can control.

If you aren't getting a matching benefit or other reward for using an employer managed investment, then you shouldn't. If someone doesn't have the time, inclination, or knowledge to understand the difference then investing in an unmatched 401k is still better than not saving at all :S

[lateforwork]

This is incorrect. First off, you do control your retirement funds. The amount of control varies, but at the very least you are offered dozens of mutual funds, indexed funds and bond funds to choose from. Some companies allow offer Fidelity BrokerageLink which allow you to invest in anything including individual stocks.

Secondly, as far as "another tax shelter" there aren't any. For most people the only tax shelter available is 401(k). And the tax shelter is a very good reason to contribute to 401(k), even if there is no company match.

[SoftTalker]

Most people could do an IRA, no?

[Multicomp]

Tacking on, in evangelical circles Dave Ramsey's financial peace university talks about saving 15% of retirement when getting out of debt and generally working through that list, then once you have paid off the house, build more retirement wealth as you desire...most of us don't get to that point until later in life.

[Izikiel43]

There is also the rent vs buy calculation to take into account, depend on where you live, it might make more sense to rent and invest the difference than buying.

[SoftTalker]

Every 401K I've been in has had some choice in investments. Even if they don't, you'd have to assume that you could do better actively managing your own funds in another tax shelter than the "S&P 500 index" or whatever the 401K is doing. For most people, this is unlikely.