Roth 401(k) vs. Roth IRA: Which One Is Better?

Roth 401(k) vs. Roth IRA: Which One Is Better? Take Your Finances to the Next Level ➡️ Subscribe now: Download FREE Financial Resources from the show ➡️ Sign up for the Financial Order of Operations course ➡️ Download The Money Guy Net Worth Tool ➡️ Our professional focus is on financial planning and investment management, and we leverage our knowledge for your benefit. We help you focus on the things you can control and manage the things you can’t. Visit our site for more info ➡️ Facebook: Instagram: Twitter: TikTok: Let’s make sure you’re on the path to financial success - then help you stay there! The Money Guy Show takes the edge off of personal finance. We’re financial advisors that believe anyone can be wealthy! First, LEARN smart financial principles. Next, APPLY those principles! Then watch your finances GROW! We can’t wait to see you accomplish your goals and reach financial freedom! New shows every week on YouTube and your favorite podcast app. Thanks for coming along on the journey with us....(read more)

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When it comes to retirement savings, there are a variety of options available to investors. Two popular choices are the Roth 401(k) and the Roth IRA. While both provide tax-free growth and withdrawals in retirement, there are important differences to consider when deciding which one is right for you. The Roth 401(k) is similar to a traditional 401(k), but with after-tax contributions instead of pre-tax contributions. This means that your contributions are made with money you have already paid taxes on, and your withdrawals in retirement will be tax-free. Most employers offer a Roth 401(k) option, and some also offer a matching contribution, which can help boost your savings. One advantage of the Roth 401(k) is that it has a higher contribution limit than the Roth IRA. For 2021, you can contribute up to $19,500 to a Roth 401(k) (or $26,000 if you are 50 or older), while the limit for a Roth IRA is $6,000 (or $7,000 if you are 50 or older). This means that you can potentially save more in a Roth 401(k) than in a Roth IRA, which can help you build a larger retirement nest egg. Another advantage of the Roth 401(k) is that there are no income limits for contributions, unlike the Roth IRA. If you earn too much to qualify for a Roth IRA, a Roth 401(k) can be an attractive alternative. Additionally, if you anticipate being in a higher tax bracket in retirement than you are now, the Roth 401(k) can be a smart choice, as you will be paying taxes on your contributions at your current, lower tax rate. On the other hand, the Roth IRA has some advantages of its own. One is flexibility. With a Roth IRA, you have more control over your investments and the ability to choose from a wider variety of investment options. You can also withdraw your contributions at any time, without penalty or taxes. This can be helpful if you need to access your savings before retirement. Another advantage of the Roth IRA is that there are no required minimum distributions (RMDs) in retirement. With a Roth 401(k), you must take RMDs starting at age 72, which can be a downside if you want to continue growing your savings tax-free. Ultimately, the decision between a Roth 401(k) and a Roth IRA will depend on your individual circumstances and goals. If you have a high income and want to contribute more than the Roth IRA limit, the Roth 401(k) may be a better option. If you want more control over your investments or need flexibility to access your savings before retirement, the Roth IRA may be a better fit. In any case, contributing to either type of Roth account is a smart way to save for retirement while taking advantage of the tax benefits. By starting early and consistently contributing over time, you can set yourself up for a comfortable and secure retirement. https://inflationprotection.org/roth-401k-vs-roth-ira-which-one-is-better/?feed_id=79962&_unique_id=6418f994aa0b0 #Inflation #Retirement #GoldIRA #Wealth #Investing #budget #buystock #buyinghouse #cash #compoundinterest #creditcard #debt #howtomakemoney #insurance #moneyguyshow #personalfinance #realestate #Roth401kvs.RothIRAWhichOneIsBetter #save #success #401k #budget #buystock #buyinghouse #cash #compoundinterest #creditcard #debt #howtomakemoney #insurance #moneyguyshow #personalfinance #realestate #Roth401kvs.RothIRAWhichOneIsBetter #save #success