Can a Taxable Account Beat a 401(k)?

Investment quality and expenses, as well as tax costs, are big swing factors.

ShutterstockProfessional/Shutterstock

Being advised to max out your 401(k) is Personal Finance 101. But is that universally solid guidance?

Tax-sheltered retirement plans offer the convenience of automatic investments and tax breaks—pretax contributions and tax-deferred compounding for traditional 401(k)s and tax-free compounding and withdrawals for Roth contributions.