What Is The Difference Between a 401(K) and ROTH IRA?
A 401(k) offers you tax benefits, either tax-deferred or taxed on that original side. Essentially, you can push off the taxes, or, if you use a ROTH IRA, you won’t be taxed in 20 or 30 years when you retire. A 401(k) only allows a maximum employee contribution of $19,000 a year and a ROTH IRA only allows a maximum of $6,000 a year. Here is what’s important. If your employer offers an employer match, meaning for every dollar, up to 5% (this varies and your employer may not offer a match) of your income, they match. So if you make $10,000, and invest $500, your employer will also put $500 into your 401(k) for example. THAT’S FREE MONEY! Don’t waste it. If your employer offers a match, make use of that.
That's what we cover, and SO MUCH MORE! As we bring on Larry Sprung.
Follow up
Mitlin Financial
Books Mentioned in the show
The Richest Man In Babylon - Original Edition
Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones
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