Roth IRAs and 401(k)s are two of the most commonly used retirement savings accounts. For people with both a 401(k) and a Roth IRA, it is best to balance retirement savings between the two accounts in order to maximize employer contributions and tax benefits.<\/p>\n
A Roth IRA provides considerable flexibility both before and after retirement. It is funded with after-tax dollars, so that it grows tax-free for the rest of the account holder\u2019s life. There are no penalties or taxes for taking an early distribution of the amount contributed to the Roth IRA, providing peace of mind in case of an emergency later on.<\/p>\n
A 401(k) is funded with pre-tax dollars and the account grows tax-deferred, so that taxes are paid when the distributions begin. Contributions to a 401(k) account receive an immediate tax deduction, but are subject to the uncertainty associated with future tax rates.<\/p>\n
The most important consideration when balancing savings between (more…)<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Roth IRAs and 401(k)s are two of the most commonly used retirement savings accounts. For people with both a 401(k) and a Roth IRA, it is best to balance retirement savings between the two accounts in order to maximize employer…<\/span><\/p>\n