Advantages and disadvantages of 401k

Advantages:

Your money goes in before taxes.

The company will often match your contribution.

You have many choices to allocate your money.

Disadvantages:

Your money is not available to be used before age 59.5 except under rare circumstances.

The money you put into this plan is not available for rent or car expenses.

Because you put money from your paycheck into a 401k on a pre-tax basis, making contributions reduces your annual taxable income and the amount of tax you have to pay ... This is similar to the way taxes work with a Roth IRA; however, a Roth 401k has a major advantage, because there's no income limit.