Which retirement savings option is better?

Whenever I read personal finance columns, the writer suggests investing in a 401(k) up to the company match AND, if you qualify, (which I do) opening a Roth IRA account.
Currently, I have a Roth 401(k) with contributions up to the maximum company match. Am I killing two birds with one stone, or is it better to have two separate accounts? I don't like the idea of being taxed later on investments AND interest in a traditional 401(k).

As a general rule of thumb if you think that income after you retire will be more than what you're currently making than a Roth 401k makes more sense. My personal advice is to diversify not only your portfolio but also diversify your taxable positions. The advantage of having the individual account it's not subject to employer rules and probably more funds available.

As for the comment above, it's wrong. The earnings are not taxable in a "Roth 401k", provided the plan qualifies the roth contributions and they meet the requirements for how long they have been in the account. Earnings are taxed for "after-tax contributions" but not the contributions, there is a difference.

401k and mutual fund

You can have both and contibute to both. I'd say go for it.

If your roth 40k contribution is paid after taxes then you cannot be taxed on the principal, only on the interest. The pricipal being the basis of the ira.d However if the contribution is paid before taxes then both your principal and interest are taxable upon withdrawal. The companies contribution, which is not taxed before being paid in, would be taxable upon withdrawal.

If you can do both go for it. I do both but in my opinion a roth is far superior to the 401k. You can take out your contributions ( I think after 5 years) to the Roth without penalty and all proceeds are tax-free.

No, you are not killing two birds with one stone. 401K (Roth or otherwise) is one retirement vehicle, and IRA is another. You should definitely contribute to both to maximize the amount you can put away for retirement.

I think you may be slightly confused about the 4 different types of accounts. In traditional 401K, the money you contribute to the account is tax-deferred, which means you pay no tax on it now but will be taxed upon withdrawal. In Roth 401K, the amount you put into the account is taxed now, but the withdrawal is tax-free. In traditional IRA, the contribution is tax-deferred whereas the contribution to a Roth IRA is taxed now. So "Roth" refers only to the taxation schedule. The difference between 401K and IRA is the requirement for each to be set-up. 401K can only be set up through your employer, whereas IRA can be set up by you as long as you make more annually than what you contribute to the account.

Having said that, here is why you should contribute to both whenever possible: the maximum contribution to 401K for 2006 is $15K whereas the maximum contribution for IRA is $4K. If you contribute to only 401K, you will only be able to contribute $15K. But if you contribute to both, you can stash away $19K for this year.