<prompt> Human: I was talking with my girlfriend earlier and trying to explain that we should be making the maximum 401k and IRA contributions allowed each year. We are both 23, she just started work and her employer wont start matching contributions until next year. Her dad told her that she should only contribute enough to get employer contributions, and that the rest should go to stocks so that she can get high returns. So essentially she plans to contribute nothing to either 401k or IRA this year.I thought it made sense to contribute the maximum to each if you can afford it, because contributions get preferential tax treatment and are subtracted from taxable income, right? Am I missing anything else? Is her dad right that she should be putting her money toward stocks when shes young? If anyone could help me understand the tradeoffs better, I would really appreciate it.  <response>: Her father doesnt seem to understand how 401ks work. They are just a type of account that provide preferential tax treatment. She can and should be investing her 401k contributions into stock-based index funds. The AutoModerator links are a good place to start for more information. 