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

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

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[MagdaleneM-fq]

I retired at 60 with $750K in my 401K and IRA's. My wife and I did just fine in expensive Bergen County, NJ by living within our means. Home was paid off. No car loans. By withdrawing bare minimum, our health insurance costs were almost non-existant due to Affordable Care Act subsidy. SS kicked in at 62. Medicare at 65. Six years later, my IRA balances have grown to $850K and now my wife is turning 60 and her IRA's are now available. Anything is possible if you live within your means. Merry Christmas!!

[Iamjacob-xo]

There's an optimal planning to retire..It is advised to contribute at least 15% of your income to a 401k and opened a Roth IRA with automatic contributions. Online calculators can help you determine how much, based on your age and income. Allocating at least 15% of your income in a 401k can help ensure that you have enough funds to retire comfortably. this allows you to take advantage of compound interest and perhaps increase your retirement funds over time through its dividends.

[florianmadison]

I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collaborative efforts in the fund my estate planner has me invested in. I do not work.

[HarperScott-pkuk]

The increasing tax rate is the reason I rolled over my 401k to a ROTH. I wouldn't want to be paying taxes on current income on withdrawals made from my retirement account. I have been maxing out my 401k, 457b and Roth IRA for the past decade. Two incomes doing the same. Grinding down hard in my 20s-30s to let it ride into my 40s and beyond.

[ianp]

Another detail often not mentioned. With a Roth IRA you can take the contributions out at any time with no penalty or taxes. With a Roth 401k the contributions and earnings are mixed, so if you withdraw early (if your plan even allows it), you’re taxed according to the proportion of contributions and earnings even if you withdraw less than what you contributed.

[MarcusRangel]

I learned that you could roll over your money from a roth 401k to a roth ira, this is the exact answer to the question I was looking for all day, thank you!

[scooterdaytona]

Roth 401K is $22, 500 for 2023 under 50 and an additional $7, 500 for catch up 50 and over in 2023 .

[HudsonEthan-]

Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.

[jeffmarsh]

I put money aside in pre tax (traditional 401k, up to the company match, sometimes more), and after tax accounts (roth ira and roth 401k). I'm in my mid 30s, I have roughly 4% of my paycheck go to a traditional 401k, 4% go to a roth 401k and I put $200/month into a roth ira. It's not a lot but it's something. The only regret I have is not starting to contribute to these accounts 5 or 10 years earlier. TIME is everything.

[davidrogers]

I have both. I believe Congress recently changed the RMD requirement, so check that out. The other thing I would add is sometimes certain 401(k) plans do not have many selections in the offered funds, so a self-directed Roth account will give you access to wide range of investment options. I would say get both and that way you can get past the 5-yr rule.

[jaimeponce]

This video is about the Roth versions of 401k and IRA but they do touch on differences compared to Traditional. They mentioned there are income limits for contributions to a Roth IRA but no income limit to Traditional IRA contributions. While there are no income limits to Traditional IRA contributions, there is a limit to take those contributions as a deduction if you contributed both to the Traditional IRA AND an ERSP I believe.

[MResearch]

Fees - my understating is if your company has a low cost 401K program like from Vanguard the 401K fees themselves are trivial. But also note the funds inside a 401K are often (usually?) institutional funds rather than retail investor finds… so the internal fund fees can actually be *lower* for a 401K Roth vs a Retail Roth.

[Roger-iliw]

First 3 minutes had nothing to do with the question lol. You should do a much longer video on this.

[lcsoc]

With the new Secure Act 2.0, a Roth inside a 401K/403b/TSP don't have an RMD anymore.

[codysantmyer]

I believe the new secure act made it so Roth 401ks don’t have rmds now

[colinmorrison]

Can we have a financial mutant show special for us 20 year olds? Give us the numbers for being in the top 5%, 1% of people.

[BlueCollar]

So my company offers traditional pretax 401k, Roth, and post tax options. My understanding is the $22, 500 IRS limit applies to the pre tax and Roth options combined. But not the post tax contributions. My question is what’s the difference in the Roth and the post tax contributions? I can’t find the info on vanguard but they are both post tax contributions so I’m not sure of the difference…..

[heavenlyblue]

Why do our federal politicians who we elect into office go out of their way to make this so confusing? Is like filing taxes - which our federal politicians insist on making so darn

[BuzzGordon]

You guys ever seen the little girl meme of "Why not both?"
That's the answer Zachary

[private]

"bobbing and weaving between all of those variables was pretty impressive stuff" Just get both, since they are BOTH GREAT. And then whenever you want, you can easily roll/move the money from the Roth 401k into your Roth IRA, since they are both Roth accounts. Easy!