401k vs Roth IRA? Investment advice?

I just started working and I'm with this company that offers me 70k annually. My company offers both 401k and Roth IRA. I think they match up to 25 percent of the first 6 percent on both types of plans. I can only put up to 30 percent of my paycheck monthly to both plans.

The question is, should I put 15 percent on 401k and Roth IRA or the full 30 percent on either plans?

My main goal is to purchase a house in 7 years. But I think i have enough for down payment even without taking money from either plans.

Well I know you don't want to hear this but I think you stated the question wrong :(

Your company has a regular 401k and a Roth 401K - not a Roth IRA. 15,500 (new limits) is the combined total you can put into both accounts in one year. (An extra 5000 limit if you're over 50.)

Matching plans usually only match on one type of acct or the other. You'd want them to match the Roth 401k and then if you want to switch over to the regular 401k you'd do that after the matching is done.

Personally I'd put half and half ... although tax experts will tell you 100% in Roth 401k ... that will change if/when we goto a flat/fair/consumption tax which is a topic for another post :)

My bet is that by the time you retire Roth accounts will be screwed over.

Since you get a matching on both, max out the IRA, first. The max contribution is lower. Once you've done that, stick it all into the 401k.

If you are correct about supporting you in both plans, then do the both plans but you are more limited as far as total contribution in the IRA . So do both doing the Roth IRA to the its $4,000 limit (unless you are over 50 then it is $5,000)

Unless it is a Roth 401(k), the 401(k) reduces your current taxable income, but you will pay taxes on the distributions sometime after age 59 1/2. But you don't want to turn down free money (the match of your company). Most 401(k) plans are limited to a dozen mutual funds (plus or minus a few).

The Roth IRA is the best mistake the government every made. The contribution to the Roth doesn't lower your current taxable income, but it comes out tax free. It can be passed to your heirs and many more benefits. You can even withdraw your initial investment without consequences given certain restrictions and those aren't many. Plus it you have the IRA with a good brokerage house, the investment potentials are huge. Thousands of mutual funds and/or individual stocks.

Do your research, be deliberate not foolish and you will be quit wealthy. You do this for the rest of your life and you will be a rich person. Good luck.

If your company offers a 401(k), by all means avail yourself of it at least enough to get the full match. Beyond that, save what you can.

An IRA is an individual plan - not through the employer. See www.ira.com for details.

If you are are saving for a house, don't use the retirement funds for that. Save for that in tax-efficient mutual funds or money-market funds.

Max out your Roth Contributions 2008 that will be $5000, or $416 a month. And then fund your 401(k) with the remaining $16,000. or $1,3333 a month.
If your company has a ESPP. Employee Stock Purchase Plan, make sure to take advantage of that as well. You basically get 15% off of stock purchase.

6% 401K (to take advantage of the match)
9% to as much as you can afford Roth IRA till you hit the limit.

After you hit the Roth limit dump that 9% (or more) back in the 401K.

Start a seperate "House Fund" in conservative mutual funds or a money-market account.

Check out Dave Ramsey. He's a personal finance guy on the radio, also an author. I'm sure you'll find some interesting reading on his website.

Check to see what tax bracket you'll be in, if you're over the the 25% bracket which is around $30k AGI (for single), you should contribute to the 401K until you can get the AGI under the the 25% bracket. then you should contribute the rest into the Roth.

in the 25% bracket a $1,000 401K contribution saves you $250 in taxes. in the 15% bracket you save 150. at this point in my opinion you're better off in the Roth. yahoo finance has a chart with the tax brackets for every situation and also try the tax calculator, although i don't like yahoos that much