Why would anyone want to forego the immediate tax benefit of removing $15.5 from their taxable income via a fully-funded 401K? If you go it alone with an IRA you are only looking at a $5K investment annually (in terms of a tax-deferred investment), so you immediately pay taxes on $10.5K by not going with a 401K. Assume for the sake of argument a 30% tax implication, there goes over $3K every year to Uncle Sam. Sorry, but I would rather have that money working for me for the next 10, 20, 30 years – whatever the time line is. Yes, you ultimately have to pay taxes on withdrawals down the road, but given the choice I would much rather address taxation issues then than now.

The market has blown up plenty of times over the past 20 years. Black Monday, the Dot Com crash, the post 9/11 crash amongst the worst. I think sitting out during these types of downturns results in you missing out on tremendous opportunities to accumulate. I think you should be fully invested and maxing out a 401K throughout the current downturn and accumulating the whole way through. If the market tanks even more – fantastic, you are averaging down even further.

To the extent available I would be in index funds or funds that are as close to an index as possible. Of course there are fees that will be a drag on your net but to forego the huge tax benefit of not funding a 401K is a much bigger net loss in my opinion.