On This Video:
Is it better to contribute to the 401(k) or Roth 401(k)? The Roth 401(k) could offer great benefits like tax-free growth & future tax-free income. But which is more tax-efficient for you and your future? In this video I talk about the differences between the 401(k) vs. Roth 401(k) and which may be better for you to save in.
Things To Consider:
A lot of company sponsored retirement plans offer a 401(k) for you to save in. Does your employer retirement plan also provide you the ability to contribute to a Roth 401(k)? A Roth 401(k) could offer some great benefits like tax-free investment growth and future tax-free income.
So, should you contribute to a 401(k) or Roth 401(k)? Your situation may help determine which could be best for you and in this video you’ll find the following guidance:
-How to determine if the Roth 401k is available to you
-The difference between the 401k vs Roth 401k explained
-How much you can contribute to the Roth 401(k) or Traditional 401(k)
-Your ability to contribute to both a Roth 401(k) and Traditional 401(k)
-Tax differences between the two
-Factors to help determine which is better for your situation
-Understand the 401(k) vs. Roth 401(k) for high income earners
-A key tip for on the Roth 401(k) to help make the most of your tax-free investment growth
One of the primary factors, in determining which may be best for you to contribute to, is taxes. You have to ask yourself what you think taxes will look like in 10, 20, 30 years from now or even longer. Do you think your taxes will be higher or lower in retirement? If you are married and 1 spouse passes away, will the remaining spouse jump into a higher tax bracket? How much do you have saved in traditional 401(k)s and IRAs and what could that mean to your taxable income when you have to start taking Required Minimum Distributions? The video discusses these thoughts plus many others to help guide you in your decisions.