In this video I explain the difference between a Roth IRA vs a 401k, and which is better for your current situation.
Knowing whether to invest in a Roth IRA or a 401k can seem intimidating, but I break down this knowledge into bite sized chunks that will ultimately help you make the right decision moving forward.
A Roth IRA is a retirement account that allows you to save by offering you a tax benefit. The contributions and your investment earnings grow tax-free, meaning there’s no tax on your Roth IRA withdrawals in retirement.
Roth IRA
– Investing with after-tax contributions
– Self-Directed
– It grows tax-free
– You can access your contributions at any time, penalty-free
– No required minimum distribution amount
A 401k is an employer-sponsored retirement plan that allows you to make tax-deferred contributions from your salary or wages to a retirement plan.
401k
– Investing with pre-tax contributions
– Employer sponsored
– It grows tax-deferred
– Employer matches a certain amount
– Contributions are tax deductible
– Distributions will be taxed as ordinary income
I personally max out my Roth IRA every year, and I also contribute up to my employer’s match in my 401k. Whichever vehicle is better for you, I highly recommend that you start investing in either a Roth IRA or 401k by the time this video is over!
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My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos are a reflection of my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort in every video that I make. I also believe in complete transparency and open communication with my audience.
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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Omg thank u. I usually try to watch finnance videos and they go everywhere and i get frustrated and just end the video. This video is so amazing and really dummied down for people like me. U explained everything so clearly u could literally be a finance teacher in college. Thank you so much def gonna check out more videos on ur page
Very helpful
So now I have an idea life insurance Term, Roth IRA and 401k I think by the time I'm in that age I will be probably well off
Roth IRA limit is too low. I’d love to put 1/2 my life savings in it. Cause the ability to withdraw principal at any time is very attractive.
I have a roth ira and a 4o1k
Look into index universal life
For the Roth IRA, do you contribute in increments or can you contribute the full amount at one shot?
I never imagined that these dividend stocks could pay me alot and obtain imaginable profits. A big thanks to my Fi_nancial advisor Gary Andrew Debellis for being my eye opener.
Does this only apply to the AGI or is this gross in terms of contributing to the ROTH IRA??
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Hi Marko, what do you recommend for someone who has no employer match with their 401k, but your salary is also too high to contribute to a Roth IRA? Lately I have been doing both traditional IRA and my 401k anyways. I recently learned about Roth conversions and currently pursuing that while government still allows..
If my job has no match then is it even worth putting any in a 401k?
What do you do if you have IRA Capital Losses?
Thank you for this video, so what do you recommend. Do employers offer match for Roth
Thanks for this video, but why is there a cut off from income above 122k, is this some sorta discouragement to future investors
I don't quiet understand this "matching". I used to work at a large grocery chain that offered this matching, but I noticed they were taking out this "match" amount that they promised from my check and putting it into my chosen retirement. My question is: how is this "free money" when it's coming out of my check??? And I KNOW it was out of my check because I sat down with my paystub and calculator and did the math. I'm so SO confused. And when I contacted my HR person, they just kept repeating that they were matching my contribution, but the math I did was telling me otherwise.
I've watched soooo many confusing videos. You've explained it clearly. Thank you!
Question. If your combined income is 170k a year but have an unearned pension of 30k a year does that make me ineligible for a Roth IRA.
Would you still support the 401K over the ROTH IRA if the employer implemented a vested percentage on the matching contributions? The vested percentage is based on years of service in the company – 2 years: 20%, 3 years: 40%, 4 years: 60%, 5 years: 80%, 6 years: 100%?
Thank you !!!
Proof that I stuck around til the end . 18:42 that’s what she said!!!
Very informative, thanks!
So essentially it’s better to do a Roth IRA incase tax rates go up over time ?
I will not invest anything that is tied in govt. they are corrupt and all they want to do is steal your money. Don’t be fooled.