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In the Ask Ramit Q&A series, Ramit answers the question, “If my employer doesn’t contribute to a 401k, is a Roth IRA a better option?”…(read more)
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roth iras didnt exist in 1970 dummy
Good points Ramit.
This guy should caveat that often times you can contribute either regular or Roth 401k. In that instance, a 401k is technically better because you can contribute more than 3x as much annually. It should be noted that you may not have great or as good of investment options in your employers 401k versus an IRA at TD Ameritrade which would be one reason to do an IRA. Otherwise, I’d do a Roth 401k.
whats the 401k ?
this is perfect, because my employer doesn't match 401k
WRONG!!! Roth IRA you pay taxes on your earning before age 59 1/2
I like your "ladder" analogy. Easy to see each of the progressive rungs. Im going to try it out on my kids as I'm teaching them about money and personal finance.
my work doesnt match anything that goes into the 401 i should stop that and open and IRA. im still reading through ramits book.
Your bank does not know what they are talking about
i got about $270 in my 401K account, I lost my job recently. During my employment, i never setup an IRA account. Since i cant set up an IRA without any income, nor I want to take a penalty from the early distribution. Should i just leave the money with the company ?
I've heard that most retirement accounts are tax deferred. But if your bank says you will be taxed, probably you will be taxed, I think!
Thank you for the good tips! I would like know how old do you consider "young"? It would be helpful if I could know that.
Haha. Hi Ramit, I think I came across that same book and I am pretty sure I found the advice in there to be very useful. I've been recommending that same book to all of my friends who have noticed I no longer break out in a cold sweat whenever the words finances, savings and retirement crosses the table. Thanks Ramit.
"…you pay no taxes on the earnings."
Ramit,
I was at my bank and I asked questions about the Roth IRA they offer. They said that you are* taxed on the interest earned. Is there a difference between the Roth IRA that a company would offer vs. one that a bank would? I feel like it is a yes. I wouldn't know the difference due to my age.