401K IRA vs Roth - which one do you do?
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Hello Fishes,
Need some advice for my cousin.
She has done MBA in Finance ,(2018 passout) after BCOM.
Worked in HDFC bank for 2 years (till 2020).
Due to personal reason left job at end of 2020.
Trained in SAP FICO, now trying for certification.
How could she get into IT company(fresher).Capgemini IBM Tata Consultancy
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A 401(k) is not a type of IRA. If you meant traditional 401(k) vs Roth 401(K) the best thing to do is max out Roth options before moving to traditional. This is because there is no tax on the growth and when you retire most of your account will be growth.
Vast majority of people have less income in retirement, especially if they primarily utilize Roth.
But of course your situation may be different Jacob.
Personally I’d prefer to retire earlier, rather than build up vast income in retirement, that far exceeds my spending during my career, and most people simply won’t have this luxury.
Shalom I had a traditional 401k until an investment banker recommended to switch to Roth you get taxed now and when you are ready to cash out no taxes are owned on them just on the employer contributions.
I do the same thing. I think our future self and potentially heirs will thank us later for tax-free withdrawals. Plus, having the initial 401k match with your firm is nice [mine is 4%]. Lower fees with a Roth IRA through a brokerage is a plus.
Some companies let you do in-service distributions, meaning you can do a rollover of your 401k and not need to leave the company to do a transfer.
I have both a 401k and a Roth IRA
Do you mean Roth 401k or regular 401k?
What you even asking here
A little from column A, a little from column B
3% firm match to traditional, rest to Roth 401k
For Roth I always think do I want to be taxed now or taxed later.
If you do Roth, your net pay will be lower so if you need money best to do pretax until your situation gets better.
I max out 401k -pre tax - (4 years doing this)
I also max out Roth IRA - post tax ( 2 years doing this )
I personally love watching it compound.
I work for Boeing and they contribute 12%
All Roth - employer match comes in with IRA so I have both by the end of the year.
Some of both. May switch to all roth as I make more.
1. Traditional 401(k)
2. Roth 401(k)
3. Traditional IRA
4. Roth IRA
There are 4 accounts to choose from and you can use all 4 simultaneously. How you use them depends on various personal factors such as tax rate and company match.
Start with knowing there are 4 different accounts (and additional types of IRAs for small businesses).
Recently switched from roth to traditional. Me and my wife are at the point where we expect to make more than we will need on an annual basis in retirement.
Sorry if this was confusing. I was saying that we think we make more now than we will need on an annual basis in retirement, so we expect to need less later.
Both
Both, the 401k match is free money
Lots of variables. Depends on where you’re at in life.
Both.
Roth 401k with employer to max company match
Roth IRA with advisor to expand the investments I have my retirement funds in
I have a Roth 401k
I say if you don’t plan on being with the company for the vesting period, it’s safer to put it in a roth ira. Especially if you’re following a budget plan in terms of savings. If your money’s going into all debt and can’t afford to set aside to save, then I agree with the dude that said to take the pretax. Both would be most ideal to have if you plan on staying long term and not job hopping. Very situational.