How should you invest in your 20s?

Without knowing more about your particular financial situation and the 401K plan in which you a participant I do not want to recommend one over the other in terms of contributing to an IRA versus a 401K.  There are numerous advantages and disadvantages to both.  However, I will provide some general information about some things which are important.  Ask your company for the Summary Plan Description for your 401K plan.  This document will describe the details of your plan.  You should check this and the plan documents for the 401K plan in which you are enrolled to find out if your company offers a matching contribution to your 401K account, and if so, what the vesting schedule for the match is.  These are important factors to consider.  If the company does offer a match which is contingent upon you contributing then you are losing out on the match if you do not contribute.  Again, the matching policy and the vesting schedule varies from plan to plan so it is important that you understand the details of how it works.  Another thing to keep in mind is that IRA accounts have deduction limits based upon your modified adjusted gross income if you are covered by a retirement plan at work.  The rules for this​ are complex and you should consult a tax or financial professional if you need further guidance.

Since you did not give any concrete facts about how your IRA or 401k is set up, I'll give some basic pointers that could rear you in the successful direction. Being in your twenties is a great time to start saving money, putting money into a 401k is a great choice since the investments will only compound over the years, which is a great advantage for people in their twenties since they have a much longer life to reap the interest. Investing with a little risk is the way to go when you're young, you have more capital to move around freely instead of stashing your savings into one account for many years. Best choice will be funding an IRA via your 401k plan so that both accounts can grow with you. Investing in the brokerage market can cause a ripple in your plans if you don't invest conservatively as well, make sure you diversify your stock portfolios and to not invest a large percentage of your savings on the market. Definitely be aggressive with your savings, but not reckless, the many years it takes to compound your savings will be better served if you started now, when you have time on your side. If you have waited too long to fund an 401k or IRA you would be losing out on a very big percentage of your savings. As for priority goes, I say the 401k and IRA are equally important and the last would be brokerage. If your 401k stipulates that your company matches a certain percentage of what you put in, that is also another benefit to investing in your 401k before anything else since you're getting matched a percentage of what you invest, it is basically free money if your 401k allows that. To summarize, 401k is a priority if they offer match, IRA then brokerage.