what happens when you change jobs, but the new job doesn't do 401k or uses a different company for retirement funds?
you roll it into your traditional IRA, or pay taxes on it and roll into a ROTH IRA (advisable)
Why would you suggest a Roth account?
because taxes are historically low and most users here are early career-ish, so the difference between their top marginal tax rate now and the lowest one when they retire is probably less than the 15% capital gains tax rate avoided by a ROTH IRA.
also you can technically draw down from a ROTH earlier, by taking "loans" from it up to the initial principal. so if you retire at 60, and put $500k into a ROTH IRA that is then worth $2 mil, you can take up to 500k out of it tax free to live off of until you hit 65 and can then draw from the rest
trad IRA/401k early withdrawal penalties are a much bigger pain to deal with
+ it's fairly necessary to have a ROTH if you plan on drawing more than 30k/year as a married couple; the benefit of a 401k is pretty minimal if you exceed the 15% tax threshold when withdrawing since then you're only deferring taxes, not avoiding them
e: under the new tax law the 30k income married couple tax rate is 12% not 15%.
So do you invest a Roth account the same way? Also, there would still be a tax penalty for transferring 401k into a ROTH account why? ---