Max Out 401K or Index Funds?

I am currently maxing out my 401K. My employer matches up to 6%. I am wondering if it's best to contribute only 6% and then buy a bunch of index funds. I'm mainly concerned over the idea that I can probably do better with index funds, but I lose out on compound interest, ... but then again, it's likely that I'll be in a much higher tax bracket when I retire.

I really like "Index Funds Advisors" approach, but I don't have the 100K minimum to open the account. Maybe I can mimic their investment approach through something like Scottrade?

Thank you

You certainly don't want to give up the 100% match offered by your employer. As to putting in more than 6%, it depends on the funds your employer offers, usually an index fund, growth fund, value funds, international fund, and a fixed income fund are options (along with company stock).

With the market as nervous as it is at this time, I'd put 1/2 in an international fund and the other half in fixed (awaiting for the market to get over it's jitters).

With these options available, I'd try to max out the $15,500 tax free dollars available. If you don't have these options, you can sign up with a discount broker and put $5000 into an IRA.

If you're making under the minimum to get a tax deduction with a Traditional IRA, choose this one. If not, go with a Roth IRA.

Best of Luck to you.
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It's hard to beat the 401k deal, but certainly not impossible. If you pay 30% in taxes and you earn $100 you get to invest the full $100 in your 401k but only $70 to invest in the index funds. By your question I think you get all that. You also get that you get to re-invest your earnings from the 401k.

At the end of the day, I think it comes down to two things. The quality of the choices offered in your 401k by your employer, and your interest in paying a lot of attention to your investments. In my experience the best way to lose money is to invest it and not pay attention. It takes research, watching the markets, and focus. If you are really going to be a student of the markets and focus on investing you might be able to beat your 401k. Personally, I think the 401k is "easy money".

hj谋