ROTH IRA vs 401(K) Which One Should YOU Invest In? | Retirement Investing For Beginners

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Күн бұрын

Should you investing a 401(k) or a Roth IRA? And what is the difference between the two investment accounts?
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DESCRIPTION:
Today we are breaking down Roth IRA vs 401k, which one is better and where you should invest your money. We're answering the questions: what is a 401k, what is a Roth IRA? Should I invest in a 401k? Should I invest in a Roth IRA? How to start investing for retirement and retirement investing for beginners all in one!
This is the quick reference video for all you need to know to decide between a Roth IRA or a 401K and which one is the best one for your to build wealth, make passive income and retire one day.
CHAPTERS:
0:00 intro
0:54 Roth IRA
3:03 401(k)
5:25 which one is better?
8:40 outro
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Views expressed in this video are my opinion and should not be interpreted as professional financial advice. I am not a certified financial advisor.
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Пікірлер: 17

@Specificpickle 3 жыл бұрын

This was very helpful! Awesome videos

@pattysofiasantoni 3 жыл бұрын

Money gives me so much anxiety! Thank you so much for these videos

@Natalie_11188 3 жыл бұрын

Hi Lexa- I’m new, hailed from Budget Girl’s channel.

@TheAvocadoToastBudget 3 жыл бұрын

Yay!!!! Welcome!!!

@nwebster84 3 жыл бұрын

Lexa, what are your thoughts on Roth 401(k) accounts? I know that even in a Roth 401(k), the employer match goes into a traditional account (which makes sense; the match isn't taxed at contribution, so if it were untaxed at distribution, it would NEVER be taxed), and that some employers don't offer Roth 401(k) accounts due to the administrative headaches that causes.

@TheAvocadoToastBudget 3 жыл бұрын

Yes! So like you said if you have a match make sure to contribute the minimum to a traditional 401(k). But I live Roth 401(k)s too! I used to contribute to one at my job. They are nice because they have the higher contribution limit. But I mainly focused on my Roth IRA because I had more control over the investments!

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@jennyskerry344 3 жыл бұрын

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@turtlescanfly7 3 жыл бұрын

I have a 403b (the non profit version of a 401k) and my employer will automatically contribute to it. I didn’t even know this was a thing until I was hired, so my plan is to max out my Roth IRA, then max out an HSA, and then max out my 403b. If I’m ever able to do all 3 then I’ll open a brokerage account for additional investing

@TheAvocadoToastBudget 3 жыл бұрын

That's PERFECT!!!! HSAs are amazing!!! You actually typically get even BETTER tax benefits with an HSA. I would look into it because it might save you even more to max that out first!

@angelarudolph2034 3 жыл бұрын

When you talked about a ROTH IRA you said you can take money out whenever even before 59.5 years old, but not the growth on what you put in. So how do you get the growth $$ out? Do you have to wait to be over 50.5years old?

@TheAvocadoToastBudget 3 жыл бұрын

Yes! So typically to take out the growth penalty and tax free, you need to be 59.5 or older!

@kelseifarmer596 3 жыл бұрын

What happens if you have a Roth IRA and then exceed the income limit? Right now I’m in a minimum wage job with a 401k from a previous employer, but I’m about to graduate and in 5-10 years I’ll probably be around the 146k/married and 206k. Would I still have an account but not be able to add anything or would I have to cash out and pay taxes on the growth?

@TheAvocadoToastBudget 3 жыл бұрын

Once you move up in that tax bracket definitely consult your CPA, but generally you can still absolutely keep the account! You just would need to contribute money moving forward in either a traditional IRA, 401k, other retirement account or just a standard brokerage account (which doesn't offer the tax benefits, but still allows you to invest)! I would also look into a "backdoor Roth IRA" it is a totally legal way to get around that income limit. But to be safe, don't do it without the help of a professional who understands your specific circumstances!

@mikedelrossi6981 3 жыл бұрын

I put 4% in Roth 401k they match 4% on a 401k plus I also have pension.is this a good mix?

@TheAvocadoToastBudget 3 жыл бұрын

That’s great!!! Make sure you’re contributing the 4% necessary to a traditional 401k because many times the match only applies to traditional accounts!

@mikedelrossi6981 3 жыл бұрын

@@TheAvocadoToastBudget my plan is the match goes to a traditional 401k account but 4% I put in goes in Roth 401k account