If someone made me America's personal-finance dictator, I'd scrap the 401(k). These workplace retirement plans are inequitable, as some companies offer good ones, some bad ones and others none at all. Fees are often too high. And even the better plans often don't provide enough investment options.

Instead, I'd like to see the Roth IRA opened up to allow 401(k)-sized contributions - $16,500 a year instead of $5,000. (Or $22,000 and $6,000 for people 50 and over.) And I'd like to see the Roth's income limits lifted, so anyone could have one.

Roth's don't offer tax deductions on contributions, as 401(k)s do, but Roth withdrawals are tax free, while money taken out of 401(k)s is taxed as income, at rates as high as 35 percent. Most importantly, with a Roth you can invest in just about anything you want, not just a set of funds picked by the boss.

But since I'm not running things, the best I can do is suggest ways to make the traditional 401(k) work best.

The first issue, of course, is whether to participate at all. The simple answer is "yes" - to the extent you can receive all the matching contribution your employer offers. Plans vary, but if the boss contributes a dollar for every dollar you put in, up to, say, 6 percent of annual salary, you could get $3,000 in matches if you earned $50,000. I wouldn't walk away from that even if the match came in a less-than-ideal form, like shares of stock in the company.

Once you reach that threshold, deciding whether to put more money in is trickier.

Start by checking to see whether you're eligible for a Roth IRA, or if you can get a tax deduction on contributions to a traditional IRA. Either would offer unlimited investing options rather than the dozen or so found in the typical 401(k).

As I said, Roths have no upfront deduction but withdrawals are tax free. With a traditional IRA, some people can deduct contributions, while all withdrawals are taxed as income. This Morningstar calculator will help you figure what you're eligible to do.

Once I'd put enough into the 401(k) to get the full employer match, I'd probably put all I could into a Roth or traditional IRA (if it allowed an upfront deduction) before I put more into the 401(k). This calculator will help you compare the Roth to the 401(k), and this one will compare the Roth to the traditional IRA.

(A traditional IRA with deduction should produce the same results as a 401(k), since both have upfront deductions and income tax on withdrawals. The only differences are investing options and contribution limits.)

Next, evaluate the investing options in the 401(k). Ideally, they should include low-fee index-style mutual funds for stocks and bonds, as well as "life-cycle" or "target-date" funds that automatically shift your money to more conservative holdings as you get older. Look at each fund's "expense ratio," a figure that shows how much of your holdings will be chewed up by annual fees. Good index funds have fees totaling no more than 0.2 percent of assets, or $2 a year for every $1,000 you have invested.

If the 401(k)'s offerings come with high fees and poor track records, think seriously about taking a pass. Remember, you can lose money in a 401(k).

By the way, if one option is to invest in your company's stock, you probably should avoid it. It's too risky to have both your income and retirement funds tied to the fortunes of just one company.

One of the 401(k)'s appeals is the tax deduction on contributions. This isn't worth very much if you are in a low income-tax bracket - less than 15 percent. The deduction can be valuable if you're taxed at 20 to 35 percent, but some of that benefit is offset by the income tax on withdrawals. The bottom line is that an investment could be taxed as high as 35 percent if it were in a 401(k), but only 15 percent if it were in an ordinary taxable account. That's because all 401(k) withdrawals face income-tax rates even if they come from long-term capital gains, which are profits on holdings sold for more than was paid. In taxable accounts, these profits are taxed at no more than 15 percent.

The 401(k) also provides tax deferral on investment gains. Even though tax is paid upon withdrawal, the deferral leaves more money in the account to compound. Also, the deferral allows you to make changes, such as selling one fund and buying another, without triggering annual tax. That makes the 401(k) useful for annual portfolio adjustments, though IRAs do this just as well.

As you see, there's no simple rule about whether investing in a 401(k) makes sense - except to get the maximum employer match. The 401(k) does impose discipline, requiring that you contribute regularly and leave your money alone for the long term. That's a benefit, for sure, but you could do that on your own with a Roth IRA, traditional IRA or taxable account.

Beyond that, you'll have to experiment with the calculators to figure which type of investment would work best for you.

Jeff Brown is an experienced business journalist and personal finance columnist who has written for The Philadelphia Inquirer, The New York Times, and TheStreet.com. Read his bio to learn more about him.