There are many parts to this, some is good and some is bad:
The question was:
Is it better to invest in a 401k or to save money in a CD or savings
but the answer was:
This is just a matter of simple math.
Saving accounts earn less than 1% per year.
CDs usually pay less than 2.75% per year.
Inflation is 1.9%-2.9% so deduct that.
401ks well invested can yield 4%-7%
The only thing worth investing in is a ROTH IRA or a no-load mutual
fund invested in an indexed fund of the DOW or S&P 500.
A 401K or an IRA is for retirement savings, a savings account or CD is for money that you will need in the next few years, or for your emergency fund. These are two different goals. So for almost everybody the answer would be you need both retirement and non-retirement funds.
The choice of 401K or IRA is dependent on do you have access to a 401K or not, and does your plan match your investments and have low fees.
The decision between Roth or traditional within the 401K/IRA depends on your income, and where you expect future tax rates to be. The answer for most people is you will end up with some of both during your career.
Investments in a retirement fund or a non-retirement fund can have various levels of risk. Depending on your income, age, and how you view risk the decision about investing in fixed income items (CD's) or index funds, or hedge funds is a more complex decision.
The advice to go no-load is good.
The answer didn't even touch on 529 plans, health savings accounts, social security or pensions. It also glossed over the fact that you can have a IRA CD.
The answer to the question "Is it better to invest in a 401k or to save money in a CD or savings account?" is, It depends on your situation and goals.
However, why a no-load mutual find invested in an indexed fund of the
S&P? Is it because you don't have to worry about figuring out how to
diversify your portfolio because the index fund already takes care of
An index fund doesn't imply diversity. The S&P 500 index, is only a part of the global market. It misses many important companies and regions. It shouldn't be 100% of all investors investments. picking an index fund becasue of lower expenses is good advice, as is picking no-load funds.