Roth vs Traditional 401k - Tax Free Millionaire in Retirement

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Roth vs Traditional 401(k): Which is better?

In today's video, we talk about the impact of saving pre-tax (traditional) vs after-tax (Roth) in your 401(k).

We walk through a retirement case study that calculates an additional $221,678 in tax-free income in retirement using a Roth 401(k) vs a traditional.

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This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you.

0:00 Pre-tax or roth: which is better?
00:58 Two biggest factors with this decision
02:25 Historical tax rates matter
02:54 +$221,678 TAX FREE INCOME IN RETIREMENT
04:43 What young professionals should know

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Are you contributing pre-tax or after-tax to your 401(k)? Let us know in the comments below! 👇

onedegreeadvisors

@ 4:20 "taking those [traditional 401(k)] deductions savings that they're getting and re-adding into other investments" False: there is *_NO_* tax *DEDUCTION* for contributing to traditional 401(k); there is a *_REDUCTION_* in taxes paid. That money saved from tax is not available to invest elsewhere "into other investments" as it resides within the traditional 401(k).

alrocky

It's not about future general tax rates. It's about your personal future tax rates.

For example you will always have the standard deduction. If you have no other income a large chunk of money will be tax-free from traditional retirement accounts. Can you imagine what the standard deduction will be in 20 or 30 years?

johngill

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