The traditional 401(k) has been around a while.
Its important to understand the differences between a Roth vs. traditional 401(k).
The Basics: Roth vs. You pay taxes on the money once you start taking distributions in retirement.
Both types of plans have contribution limits based on age.
Those limits are unchanged since 2020.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help… An IRA is not tied to your employer its your account alone.
Theres no other thing like that in this country, in the tax code.
Theres absolutely nothing like it.
Its an amazing thing.
Think about investing and never paying taxes again, forever.
You dont have to pick just one throw in of 401(k) to invest in.
Did you know?
Primarily, these people are early in their career, like millennials born between 1979 and 2000.
Paying the taxes when you contribute also eliminates uncertainty about changing tax laws in the future.
But there is one caveat.
So you would want to manage that conversion, meaning you dont do it all in one year.
Take a look at your current cash flow.
Lets say theres a million dollars in there when youre ready to take it out.
In a regular 401(k) you are going to be writing checks for $250,000.
Remember, it doesnt have to be all or nothing.
For most people, Barnett says the Roth 401(k) makes sense.
Theres no other tax opportunity out there that gives you those advantages, he said.
It has given savers a way to pay taxes once when theyre in a low tax bracket.
I cant stress the impact of what that means over a long period of time.
Interest is never taxed, dividends are never taxed, capital gains are never taxed.
Its an absolute no-brainer.
She likes to save money so she can travel more.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
