Is a Roth 401(k) Better Than a Roth IRA?

Listen to how ordinary people built extraordinary wealth—and how you can too. You’ll learn how millionaires live on less than they make, avoid debt, invest, are disciplined and responsible! Featuring hosts from the Ramsey Network: Dave Ramsey, Ken Coleman, Christy Wright, Rachel Cruze, Anthony ONeal and John Delony.

[HugoBergmann-lund]

Biggest financial mistake I ever made was with my 401k. My company had a Roth 401k when my kids were in college, but I didn't actually start contributing until year 3 of the 6 years I had kids in college. Because I was helping them with expenses, I was entitled to the tax credits, so my effective tax rate was extremely low. That is the time you NEED to be in a roth! i still retired with about $350k in my 401k.

[EvaHoffmann]

I've recently allocated my Roth IRA to 50% SCHD, 25% SCHX, and 25% SCHG. Meanwhile, my Roth 401(k) is divided into 70% Vanguard S&P 500 Index, 20% Vanguard Growth Index, and 10% Vanguard International Index. My goal is to grow my $350, 000 portfolio to over $1 million in just three years before retirement. I'd love to hear your thoughts and suggestions on how to optimize my investments for maximum growth!"

[claircourtway]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[NickRBellas]

Roth IRAs are a tax-efficient choice for investment. Contributions are made with after-tax dollars, and your investments can grow tax-free. In retirement, withdrawals are tax-free, allowing you to keep more of your earnings. The power of compounding, earning interest on both your initial investment and its returns, means your investment can grow exponentially. Starting early gives your investment more time to benefit from compounding.

[Javier_Rodri]

Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.

[arthurhughes]

Great video, I have always wanted to invest and start my retirement plans early enough, but I never did. I hope it is not too late for me? I will like good advice on how I can start up my retirement and put up some investments as well. This world in getting more difficult to live in everyday. One needs to prepare for the future and kids inheritance.

[spectartacus]

$19, 500 limit in the Roth 401k this year vs. $6000 limit in the Roth IRA. It's an incredible vehicle for retirement either way.

[MrGravity]

I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?

[alisonwalker]

I have worked all my life without thinking about my retirement. Now my kids are growing fast, the way I am spending my savings, it has come to my attention that at my old age, I will have no jobs, no money left and no retirement funds to fall back to. So I am asking what do I need to do and how do I begin investing in my retirement. I just need professional advice. Thanks.

[EMo-rxpm]

Remember company match will go into your traditional 401k

[barttfisher]

Recently retired and unsure if my 401(k) and IRA will provide a stable future. i need an approach that will align with my risk tolerance and financial goals, i set aside $1m to achieve this. Do you suggest i get into stocks or buy a rental property?

[livingunashamed]

I disagree. I love the roth ira better after the match because usually less fees, you don't have to worry about the company delaying contributions, don't have to worry about the transfer issues after you leave the job, etc. You just have way more control with an IRA. I would do Roth 401k match, then max out the Roth IRA, then max out an HSA if you have one THEN come back to the 401k.

[Je.rone_]

I use both Roth 401k and Roth IRA, the $6, 000 ira limit is too small

[josereyes]

Caller: Hey Dave I have a question about my 401k
Dave: Better than I deserve what can I help you with?
Caller: I wanted to know the difference between 401k and IRA.
Dave: Sell your truck, like yesterday!

[Cwillyify]

Employer match in the 401k, Max HSA and Roth IRA, then either come back to 401k or contribute to a taxable account depending on goals. The HSA and Roth IRA have too many benefits and flexibilities to pass up

[SamsonKempston]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family....

[fennecbesixdouze]

It's not true that fund choices are the only consideration for Roth 401(k) versus Roth IRA, the Roth 401(k) also has additional restrictions such as RMDs that make it inferior to the Roth IRA.

After you get your employer match (whether that's Roth 401(k) or your company only offers Traditional 401(k)), you should immediately turn to maxing out your Roth IRA.

[jaredbutler]

... there's a big difference on when you can access the account. Roth IRA principal can be accessed earlier than ROTH 401k which can make a big difference if you retire before 59 1/2. While the growth would be same, the actual accounts have some different rules behind them, so please consult a professional and see what works best for your situation

[imveryhungry]

such amazing advice on this show i really wish i had learned all this earlier in my life.

[wolflink]

Both are good. Max out employee March then Roth though