<prompt> Human: Let me preface this by saying Im 19.Ive been contributing 3 of my pay check to my 401k for about a year now, and I just dont feel like Im contributing enough. My company matches 3 so I figured thats what Id contribute.Anyways, Ive changed my mind and decided to contribute the maximum of 10 of paycheck. I can afford it and I want to do it. However, the problem is that I dont know how I should allocate this 10. Currently my allocation looks like this:Baird Aggregate Bond Fund- 10State Street SP 500 Index Fund Class E - 80State Street SP MidCap Index - 10I feel like I should have the small cap in there and also the international, but I heard that the international that my company offers isnt so good.Should I just scrap my current allocation and invest 100 in the State Street Aggressive Strateg Bal, or do I just need to add a couple of things to my current portfolio?Im just really confused and dont want to mess up my retirement.A while ago I was told by some users here that I should just keep my contribution at 3 and open an IRA with Vangaurd, but Id prefer to keep all of my retirement in my companies 401k.Many of the people I work with retire millionaires, so I figured that I would ask my co-workers for some advice. Literally everyone Ive asked so far is investing 100 of their retirement into company stock. Isnt this a big no-no when it comes to retirement? I really dont think my company will be going anywhere soon, and its only expanded since its inception, but I just dont feel comfortable putting all of my eggs in one basket. One stock for 28 in 1978 is worth 10,000 today, so I understand where my co-workers are coming from. Its just that I feel like Im getting mixed signals. What should I do? Here are all the stocks, funds, bonds, etc. that my company offers. I cant find the tickers on all of them for some reason. Also some of them only listed a TAOER Total Annual Operating Expense Ratio. I dont know if thats the same as a plain old ER, but Im pretty sure it is. Any help will be greatly appreciated!Name Ticker ER---------Invesco Stable Value Trust 0.27Baird Aggregate Bond Fund BAGSX 0.55 T. Rowe Price Value Fund TRVLX 0.82State Street SP 500 Index Fund Class E 0.123T. Rowe Price Blue Chip Growth Fund TRBCX 0.72State Street SP MidCap Index 0.05DFA US Small Cap I DFSTX 0.37American EuroPac Growth R-4 REREX 0.84Company Stock 0Cash Component of Company Stck SSIXX 0.12State Street Conservative Strateg Bal 0.020State Street Moderate Strateg Bal 0.020 State Street Aggressive Strateg Bal 0.020 Assistant: Not related to your specific question about which direction to go with investments, but tangentially related to retirement:You didnt mention a Roth nor did you mention any specifics about your income, but generally it is advised to contribute up to your company match, then 5500 per year to a Roth at a place like Vanguard, Fidelity, or Schwab and then back to the 401k with anything beyond that 5500 per year.Also those expense ratios are not bad, but you can do better -- another reason to max out a Roth or traditional IRA before going back to the 401k.Human: I work part time and make about 15,000 a year. I have no debt, and Im living at home until I finish my degree and can afford to move out. Why is it better to contribute to both a Roth IRA and a 401k at the same time?Will it really make that much of a difference?  <response>: Adding to bilbravo. But, first, WAY TO GO! Im giving you a standing ovation right now. Not ONLY are you 19 and putting money into a 401k, youre ASKING QUESTIONS that most people not most smart people wait until theyre 40 or 50 to ask. CLAP CLAP CLAPThe differences between 401k and IRA TraditionalRoth are the company matching funds and the taxes. And to cut to the chase, youll be wanting to fill up that ROTH IRA as quickly as possible AFTER the company match 401k.When your company matches a contribution, you are effectively making immediately a return equal to the match. Your 3 is doubled by the company so youre getting a 100 return. Thats a huge win. We all want that one. Contributions beyond the match have less not horrible value. First a thing about pre-tax. When you see pre-tax on anything, think of it as the government providing an incentive or aid to help you accomplish something. The amount of that support is equal to how much it reduces your tax bill. Thats key. Investment choices are all about maximizing returns. Tax avoidance is money made just like getting 3 from your company and just like getting growth in a mutual fund. Setting aside money pre-tax means more, the higher your tax bracket. If you made 100k, you could put in 18k to a pre-tax 401k, and not pay income taxes on that 18k. That would save you about 5k or 6k on your taxes. If, however, you only made 18k, and put all of it into your 401k, you would only save a few hundred dollars, if any, on your taxes.A 401k contribution is pre-tax. Money you put in reduces your taxable income. When you are retired, and you start taking money OUT of the 401k, the total amount you take in a given year is added to any money social security, I think counts you make and you pay taxes on that money. In theory, when you are contributing to a 401k, your tax rate is higher on the money when it is being saved than when it is coming out to be spent. This is not the situation right now for you. A Traditional IRA works like a 401k, but you are putting in money on your own, instead of through a company plan. It reduces your taxable income and it is taxed later when it is spent.A Roth IRA is different. You put in money now and get no tax benefit today. When you take money out, it is tax free. The reason you should be favoring after the company match is reached in a 401k a Roth IRA is because you arent really receiving any significant gains in the 401k from the government this year. 