Roth IRA vs 401k (2021)

by | Jul 31, 2022 | 401k | 23 comments

Roth IRA vs 401k (2021)




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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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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23 Comments

  1. Mila W

    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

  2. TRUCK N FREEDOM

    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

  3. AmyX

    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.

  4. Rami Gorges

    Look into index universal life

  5. Albert H.

    For the Roth IRA, do you contribute in increments or can you contribute the full amount at one shot?

  6. Alfred Albert

    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.

  7. Jusmsrob

    Does this only apply to the AGI or is this gross in terms of contributing to the ROTH IRA??

  8. Manny Koenig

    The Mazda 787B was the culmination of mazda's rotary-engined group C race cars. The Mazda 787B with the car number 55, and chasis number 787B-002, completed 362 laps (approximately 4,923 Km) of the 13.6 Km long Circuit de la sarthe at the 59th 24 hours of le man's in 1991, becoming the first Japanese car to win the race .

  9. Dillan Damodar

    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..

  10. Victor Poitier

    If my job has no match then is it even worth putting any in a 401k?

  11. Ronny Atdrik

    What do you do if you have IRA Capital Losses?

  12. Dr.

    Thank you for this video, so what do you recommend. Do employers offer match for Roth

  13. Dr.

    Thanks for this video, but why is there a cut off from income above 122k, is this some sorta discouragement to future investors

  14. jklfds85

    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.

  15. Boogie Time

    I've watched soooo many confusing videos. You've explained it clearly. Thank you!

  16. fort grove

    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.

  17. D N

    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%?

  18. BlckPwr 007

    Proof that I stuck around til the end . 18:42 that’s what she said!!!

  19. Juan Carballo

    So essentially it’s better to do a Roth IRA incase tax rates go up over time ?

  20. Katelyn Stewart

    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.

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