Does your retirement plan build tax-free wealth efficiently? Are you using a Roth IRA, Roth 401k, or Roth Conversion to add to your tax-free bucket? You can schedule an appointment with one of our Retirement Experts to look at your situation and help you plan for your future. Call us at (920) 544-0576 or go to

What is the best way to add money to your tax-free bucket?

✅ Should you contribute to a Roth IRA?
✅ Should you contribute to a Roth 401k?
✅ Or should you perform a Roth Conversion?

Even though each of these ends up with more dollars in Roth Accounts but what is the best Roth account and best way to add to these important retirement accounts?

A Roth IRA is quite different from a Roth 401k.

Roth IRAs are not subject to RMDs. They have a larger universe of investment options to choose from. And in certain ways, they have more accessibility, specifically before age 59.5.

Roth 401ks have a completely different set of benefits. Roth 401ks are afforded higher contribution limits with no income limit. They also can provide a match depending on your employer. They have creditor protections not afforded to Roth IRAs and they also have the ability to use the rule of 55!

So which is the best Roth account to contribute to?

Watch this video as we discuss the benefits and drawbacks between each account and also talk about whether a Roth contribution vs. a Roth Conversion makes more sense in order to transfer more wealth into these accounts.

#RothIRA #Roth401k #RothConversion #RetirementIncomePlanning

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Planning for your retirement is a critical decision that requires proper consideration. With various types of retirement plans available in the market, it is essential to weigh your options and choose the best plan that suits your financial goals. Two of the most popular retirement plans in the United States are the Roth IRA and Roth 401(k).

Roth IRA and Roth 401(k), both are retirement investment accounts that provide tax-free growth on the money you contribute. However, they differ based on their features and eligibility criteria. In this article, we will compare Roth IRA vs. Roth 401(k) to find which plan is best for you.

Eligibility criteria

A Roth IRA is available to anyone who has earned income and a maximum adjusted gross income of $140,000 (single filers) or $208,000 (married couples filing jointly). On the other hand, a Roth 401(k) is an employer-sponsored plan offered to employees who have access to this benefit.

Contribution limits

For the year 2021, the maximum contribution for a Roth IRA is $6,000 (if you’re under 50) and $7,000 (if you’re 50 or older). With a Roth 401(k), the contribution limit is higher at $19,500 (if you’re under 50), and $26,000 (if you’re 50 or older).

Employer Matching

One of the significant benefits of a Roth 401(k) is that the employer may match contributions, which can significantly increase an employee’s retirement savings. Unfortunately, there are no employer contributions with a Roth IRA.

Withdrawal rules

When it comes to the withdrawal rules, Roth IRA has some advantages over Roth 401(k). Roth IRA contributions and investment gains are accessible without penalties after five years of opening the account and reaching age 59 1/2. In contrast, with Roth 401(k), withdrawals are subject to the same tax and penalty rules as regular 401(k) plans.

Rollovers

Roth IRA provides flexibility in shifting the account balance into another qualified retirement plan. Additionally, you can consolidate multiple Roth IRA accounts to a single account. However, Roth 401(k) does not allow you to roll over funds to another qualified plan.

Fees

Both the Roth IRA and Roth 401(k) have fees, including administrative fees and investment expenses. Usually, Roth IRA fees are lower than those for Roth 401(k) plans. In general, fees play a significant role in the total amount of retirement savings, so it’s essential to compare both costs and choose the best option for you.

Conclusion

Roth IRA and Roth 401(k) are both excellent choices to boost your retirement savings. However, the best option depends on your individual needs, financial circumstances, and retirement goals. If you are eligible for both, you can choose to fund them simultaneously or alternate contributions between the two. Overall, it’s essential to get professional advice from a financial advisor and understand your options to choose the right investment plan to secure your retirement.