Roth vs 401k

I can set forth the information for you. You need to project where you at and where you will be. When there is an employer match no if ands or buts, take it.

Roth

A roth is all post tax contributions. Meaning your money will be taxed in the year you earned it and then invested. Now the tax benefit is that when you withdraw the money in retirement at least 59 1/2. If you make over $110,000 you cannot contribute the full $5,000 amount for a single filer and $173,000 for joint filers.

When should you contribute to a Roth IRA? We can make this pretty simple. If your younger and expect to move up tax brackets it makes sense to pay the tax now and take advantage of the tax fee withdrawals. Now I should warn you. The government can change what they want when they want. There would obviously be a big uproar for changing this though. What I personally love about a Roth is that it eliminates double taxation. Double taxation is the fact that the corporation pays tax on the income and the shareholder pays tax on dividends received. Meaning that all dividends received are tax liability to the corporation and the shareholder. Taxing the same money twice. Everyone agrees that this is an issue, but nobody can make a fair point to not tax one over the other. Keep in mind the government would have to find income another way also.

If you're 20-30 and plan to move up the corporate latter you should definitely be thinking about contributing as much as you can to your Roth. 30-40 age group I think it's important to stay diverse and take advantage of tax advantages. You should put in partially of what you can contribute. Age group 40-45 this probably needs to be an afterthought but I would contribute some to it if you can. I wouldn't max out my 401k and then go to my roth yet in this age group.

401k or 403b

Lets just use the term 401k in joint with 403b becasue they are basically the same thing. The real difference is for the employer. 401ks are more common. You can contribute up to $17,500 currently and withdraw with no penalties at 59 1/2.

401k is basically the opposite of a Roth. It is a tax deferred account. Meaning you don't pay tax till you withdraw. Where is the benefit? When your retired and you're only money is coming from your retirement plan and maybe you're making minimum wage sitting on a golf cart hopefully. Your income should be significant less then just before you retire. Meaning you are moving the money from being taxed at a higher tax bracket to a lower tax bracket. It will also delay your tax liability. If I'm in a 25% tax bracket and put in $4,000 that is $1,000 that I didn't have to pay this year.

401k is a tax sheltered aimed to move your money to a lower tax bracket when your retired. It makes the most sense to contribute most you can when your in your highest tax bracket probably later in your career. 50-60 age group you should consider trying to max out your 401k first then moving to your roth. Then basically the opposite as above against the Roth.

You should be contributing what you can to your Roth and/or 401k. Later in your career about to retire flood to your 401k and then your roth if you can. Early in your career try max out your roth, but always meet your employers maximum match first.