Roth IRA vs. 401(k): Pros and Cons

The Roth IRA and 401(k) are two of the most popular retirement accounts.

Choosing which strategy is best for your circumstance can be a tough decision.

This article will compare the benefits of choosing a Roth IRA vs. 401(k),

and help you decide where to save and invest for the long run.

What are the differences between a Roth IRA vs. 401(k)?

The first significant difference between investing in a Roth IRA versus a 401(k) plan is how you go about making contributions.

With a Roth IRA, the onus is on you to open the account  and then fund it.

With a 401(k), contributions come directly from your paycheck through your employer’s payroll system.

Snatch the 401(k) Match

It’s also important to consider how employer matching contributions work within a 401(k) plan. Many firms have a matching policy.

Pulling money out of your retirement comes with a penalty. With a Roth IRA you can withdraw contributions at  any time.

Early Withdrawal Rules

A Roth 401(k) is  another employer-sponsored retirement account, but will grow tax-free through retirement.

how do Roth IRAs differ from Roth 401(k)s?

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