Why Does Dave Prefer a 401(k) Over a Roth IRA?

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[Vladimirluxperfumes]

I prefer a 401(k) because of the higher contribution limits compared to a Roth IRA, which allows me to save more for retirement each year.

[victorespino]

Dude, 401k only up to the match. The rest into a roth, then if extra, you can do more into the 401k or just create a taxable mid term account.

[tomludlow]

Simply put, dave says the order should be:
1. 401(k)Match
2. Max ROTH
3. Max 401(k)

[alex]

401k beyond the match isn’t worth it...
should be 401k up to match limit then Max out Roth IRA then go back to 401k if you still have money to contribute... if you have Roth 401k Max it out

[Riggsnic_co]

We experienced the peak of our era, and now it is gone. Recession is tanking everything including 401K. My retirement equities portfolio of $750K is in the reds. I keep losing because of inflation. This world will fall to the corrupt rulers in the same way that Rome did. I'm sorry if you're thinking about retiring and you're worried that your pension won't be enough to meet the rising cost of living. Horrible foreign policies everywhere, bad regulatory policy, bad fiscal policy, and bad energy policy.

[erato]

Glad they mentioned you can do both. So many people don't know that.
Also, some companies have Roth 401 which is awesome!!!

[williamhall]

I don't understand why this is being presented as an either/or choice? For most people there is no reason you can't have both..I do.

[kaylawood]

The 401k is good, because retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k. My mom retired with about 4.2 million, but my dad retired with roughly 1.8 million. So it really does.

[alisonwalker]

Great video, 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.

[AHarmlessPear]

Yup started my 401k and Roth a few months ago! I don’t make much but my company matches my 4% for the 401k and I’m putting in $100-200 in my roth every month.

[gidave]

I did both when i was working. That's why i was able to retire at 55.

[reginatheresa]

Roth beats traditional 401k but match beats Roth. Makes sense to me! But it really depends on where you are in life. I know a lot of Dave’s YouTube viewership is young people so for us, don’t count out the Roth!

[Achilles]

The best option is the Roth 401(k) if your employer provides that. You get the tax advantage of the Roth plus the greater contribution and match of the 401(k).

[SophiaMia-rp]

My major concern is how I can protect and preserve my wealth in savings against the various harmful economic forces, regardless of what the high and mighty economic talking heads discuss at the conference. What are the instruments I can buy to help meet my goal?

[gabemorante]

The only thing is that with the roth or traditional ira you do have more control of what your investing in (being in the stock market vs owning stock) and you have much lower fee if any.

[caseybills]

I'm uncertain if my 401(k) and IRA will secure a stable future. I'm looking for an investment strategy that aligns with my risk tolerance and financial goals. I've set aside $1 million for this purpose. Would you recommend investing in stocks or purchasing rental property?

[jonathana.]

That man has a really satisfyingly deep voice

[kortyEdna]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.

[thadofalltrades]

There's no reason to max out the 401k if you don't need the tax breaks. Max out the match in the 401k, then max out the ROTH, then do more in the 401k if you want to save above that number. Until you're making like $75k+ there's really no benefit to doing the 401k over the ROTH beyond the match. Someone who has higher income is needing to get that taxable income down and so it makes more sense to do the 401k first.

[yummy]

A lot of 401k plans have a Roth 401k option too. Your check deferrals will go to the Roth and the employers match will go to the traditional 401k