Confused about the difference between a Roth IRA & Traditional IRA? What about the Roth 401(k) & Traditional 401(k)? Today I wanted to cover the differences and similarities between all of these investments that are available to you.

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I do not have my securities license nor am I a financial advisor. The ideas, concepts and opinions presented in this video are for entertainment purposes only and viewers should do their own research prior to making any future financial decisions.

Feel free to reach out to me if you have any questions: ericanthonylopez1996@gmail.com

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Roth IRA:
– Account opened independently
– Thousands of options to invest
– Invest up to $6000 annually
– Post-tax contributions
– No match

Traditional 401(k)
– Company opens account for you
– A dozen different investing options
– Invest up to $19,500 annually
– Pre-tax contributions
– Company may offer a match

Roth 401(k):
– Company opens account for you
– A dozen different investment options
– Invest up to $19,500 annually
– Post-tax contributions
– Match goes into traditional 401(k) portion

Traditional IRA:
– Account opened independently
– Thousands of options to invest
– Invest up to $6000 annually
– Pre-tax contributions
– No match

So which one is better? Well… it depends. In my opinion, a combination of both pre-tax and post-tax investments help diversify your portfolio. Currently, I have my own Roth IRA with Vanguard but have held off on contributing to the account in order to put all of my money into my high-yield savings. This money will ultimately be used to purchase my first investment property.

If you are in your teens, 20’s or 30’s I’d recommend starting a Roth IRA first. Max out your contributions if you have the means to do so since it is one of the easiest ways to become a millionaire by the time you retire. Then, assuming you are employed and that your employer offers a 401(k), consider contributing to that account as well… especially if there is a match.

Now, if you are over the age of 40, then it is likely that you are making more money than a 20 year old and because of this, you’d automatically be placed in a higher tax bracket. It may make more sense to start a 401(k) first to lessen your tax burden and invest in a Roth if you have money left over.

Everybody has different circumstances so I don’t think that there is necessarily a one-size-fits-all strategy but I can guarantee you that the more money you put away for your retirement, the better!…(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA