The tax rules for a 401(k) and an IRA are actually exactly the same. With a ROTH, your PRINCIPAL contributions can be taken out at any time without additional taxes or penalties since you already paid taxes on this money. Any GAINS taken early from the ROTH would be penalized and you would have to pay taxes. Traditional 401(k) and IRA would have an early withdrawal tax and penalty no matter what since no tax has been paid on the principal. Also your company may restrict how much you can take out from your 401(k) while you are still working at the company (talk to your HR department for details).

That being said you are definitely right about the contribution limits - 401(k)s are higher. Usually, people go with the 401(k) because of their company's match, however for you, it sounds like this does not apply. So in that case, many people would choose to go with an IRA because you have a lot more flexibility with your IRA. You can open the IRA with any bank, brokerage firm, or mutual fund company you want to and you can invest it in anything you want. With a 401(k) you can only invest in the fund options provided in the 401(k).

As far as returns go, that depends on what you invest the money into. In general, if you are younger and have a long time to invest - stocks are probably your best bet, and you might look into a broad market index fund such as those offered by Vanguard or State Street Global (to name a couple of large examples). As you approach your retirement, you would want to begin to set money aside into safer assets (typically bonds).

Good luck figuring it out, it might be helpful to talk to a financial advisor.

Lot of info we don't know. Your age, salary, cash in the bank, your risk tolerance.

You need a one on one with an "expert". Whether it is face to face or on the phone or on-line depends on where you live. The expert will want a lot of info to make a good recommendation for you.

Go to Yahoo Finance for a few hours and you can learn all you need to know (or at least get a good start)

Seek a certified financial planner

Best of luck. Take Care

You should have an emergency fund as a buffer to get you through the rough times. If you think of your retirement fund as that buffer, you will have a very tough retirement.

Hi. I work in a company that offers 2 types of (Tax Sheltered Annuities) TSA : Traditional and Roth 401k retirement plan. The company doesn't match. maximum contribution is $17,500 a year. Now I don't have an option for early withdrawal, unless I have to prove a hardship, where I'm going to be penalized with 10% plus tax.(even I can't withdraw my principal).

I searched online for IRAs and I found that Roth (or traditional) you can withdraw my money anytime, don't have to prove hardship where still I'm going to get penalized and pay tax (on the earnings only in the case of Roth) but still, I have access to my money anytime. Max yearly contribution is $5500.

I don't know about the yield interest average for both which is higher

It's true that in the first case (401K) I can borrow money for it, and payback with variable interest.

From the 2 examples above I feel that IRA is better because there is an option to withdraw anytime (although with penalty and tax, rather than no option at all) and please correct me if I got any info wrong.

The bottom line is that I'm looking for an option instead leaving my money in my checking account, I'd put a saving/retirement account where if I needed it for any reason, not necessarily hardship, I can withdraw it, and I would be still gaining money

Can you please advise with option is better. And can I open IRA at any bank?

Thanks!