Whether an IRA or a 401k, if you have funds that you don’t need for a VERY long time, the trade-off between immediate access to after-tax dollars vs. delayed access to pre-tax dollars is a good one - and regardless of employer matching funds.
When you put pre-tax money in either vehicle, your investment rate of return is based on the whole dollar. A $10,000 pre-tax investment growing 10% in a year gets you a $1,000 return. Of course, you later have to pay tax on the monies you withdrawal, but you’re growing and compounding your return based on the WHOLE pre-tax dollars invested - whether your own, or matched by your employer.
When you invest after tax, that same $1.00 of earnings might only leave you with $0.65 to invest. So, instead of earning 10% on $10,000, you’re earning it on $6,500. You get $650 instead of $1,000, AND you have to pay tax on that return in the year earned. (assuming you realize the gain).
So, yes, you have immediate access to your cash, but there’s less working for you in normal times.
Very true, but of course, that all works on the assumption that you will see a positive return on investment, over the long run. If that trend doesn’t continue, or inflation overtakes the returns consistently, then you might have been better off just spending it as soon as you got your hands on it.