My company does not offer match on their 401k and the fee on the 401k is about 0.3% higher than what I could get the same exact fund in a taxable brokerage account outside of my 401k (or in a regular IRA). The question that has been plaguing me, is it still worth it to invest in my company's 401k and what fee would make it no longer worth investing in my 401k.

So I crunched some numbers.

Assumptions: 22% tax bracket in my working years, 20% tax bracket in my retirement years, 15% long term capital gains rate, no additional state taxes, working/contributing for 20 years before being able to roll it over to the lower fee IRA and start to withdraw money, pre-tax rate of return 12.08% (10 yr VTI ETF return), and after tax rate of return of 11.59%.

Results: The 401k fee would need to be more than 2% for the taxable brokerage account to make sense.

I know there are other benefits to the taxable brokerage account (i.e. no required minimum distributions, can withdraw without tax penalty before retirement age, step up in cost basis if inherited), but I wanted to get your thoughts on what 401K fee would be too high that would make you contribute to a taxable account instead of the 401K.

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