In this episode, Dan & Ian breakdown the two different types of 401ks. They explain the differences and give their opinions for people based on their circumstances. They explore the psychology of money and stress surrounding financial literacy. Their goal is to bring financial knowledge and accessibility to all those who choose to listen. Thank you for being apart of this community. 

Regular 401k Taxation:
-Lowers the amount of your taxable income by the amount that you contribute
-If you are in a high tax bracket this may be attractive, because it reduces your taxable income
-Pay the tax on the money contributed and the gains when the amounts are withdrawn
-Usually withdrawal will be during retirement so you will be in a lower tax bracket which will decrease the amount you are taxed on the money
Roth and Traditional 401ks have a contribution limit of $19,500 and you can add an extra $6,500 if over the age of 50 for "catch-up" contributions
-Any amounts withdrawn will be fully taxed and subject to 10% penalty (if it doesn't fit the few exceptions)

Roth 401k Taxation: 
-Money goes into account is after tax dollars
-So your income is fully taxable and you are contributing with money that is all yours
-All withdrawals after age 59.5 are completely tax free (basis and gains)
-Also can withdraw your basis in the account at any time, since you already paid tax on it

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