Rules for Inheriting an IRA: Children and Other Non-Spouse Beneficiaries. ._1zyZUfB30L-DDI98CCLJlQ{border:1px solid transparent;display:block;padding:0 16px;width:100%;border:1px solid var(--newCommunityTheme-body);border-radius:4px;box-sizing:border-box}._1zyZUfB30L-DDI98CCLJlQ:hover{background-color:var(--newCommunityTheme-primaryButtonTintedEighty)}._1zyZUfB30L-DDI98CCLJlQ._2FebEA49ReODemDlwzYHSR,._1zyZUfB30L-DDI98CCLJlQ:active,._1zyZUfB30L-DDI98CCLJlQ:hover{color:var(--newCommunityTheme-bodyText);fill:var(--newCommunityTheme-bodyText)}._1zyZUfB30L-DDI98CCLJlQ._2FebEA49ReODemDlwzYHSR,._1zyZUfB30L-DDI98CCLJlQ:active{background-color:var(--newCommunityTheme-primaryButtonShadedEighty)}._1zyZUfB30L-DDI98CCLJlQ:disabled,._1zyZUfB30L-DDI98CCLJlQ[data-disabled],._1zyZUfB30L-DDI98CCLJlQ[disabled]{background-color:var(--newCommunityTheme-primaryButtonTintedFifty);color:rgba(var(--newCommunityTheme-bodyText),.5);fill:rgba(var(--newCommunityTheme-bodyText),.5);cursor:not-allowed}._1zyZUfB30L-DDI98CCLJlQ:active,._1zyZUfB30L-DDI98CCLJlQ:disabled,._1zyZUfB30L-DDI98CCLJlQ:hover,._1zyZUfB30L-DDI98CCLJlQ[data-disabled],._1zyZUfB30L-DDI98CCLJlQ[disabled]{border:1px solid var(--newCommunityTheme-body)}._1O2i-ToERP3a0i4GSL0QwU,._1uBzAtenMgErKev3G7oXru{display:block;fill:var(--newCommunityTheme-body);height:22px;width:22px}._1O2i-ToERP3a0i4GSL0QwU._2ilDLNSvkCHD3Cs9duy9Q_,._1uBzAtenMgErKev3G7oXru._2ilDLNSvkCHD3Cs9duy9Q_{height:14px;width:14px}._2kBlhw4LJXNnk73IJcwWsT,._1kRJoT0CagEmHsFjl2VT4R{height:24px;padding:0;width:24px}._2kBlhw4LJXNnk73IJcwWsT._2ilDLNSvkCHD3Cs9duy9Q_,._1kRJoT0CagEmHsFjl2VT4R._2ilDLNSvkCHD3Cs9duy9Q_{height:14px;width:14px}._3VgTjAJVNNV7jzlnwY-OFY{font-size:14px;line-height:32px;padding:0 16px}._3VgTjAJVNNV7jzlnwY-OFY,._3VgTjAJVNNV7jzlnwY-OFY._2ilDLNSvkCHD3Cs9duy9Q_{font-weight:700;letter-spacing:.5px;text-transform:uppercase}._3VgTjAJVNNV7jzlnwY-OFY._2ilDLNSvkCHD3Cs9duy9Q_{font-size:12px;line-height:24px;padding:4px 9px 2px;width:100%}._2QmHYFeMADTpuXJtd36LQs{font-size:14px;line-height:32px;padding:0 16px}._2QmHYFeMADTpuXJtd36LQs,._2QmHYFeMADTpuXJtd36LQs._2ilDLNSvkCHD3Cs9duy9Q_{font-weight:700;letter-spacing:.5px;text-transform:uppercase}._2QmHYFeMADTpuXJtd36LQs._2ilDLNSvkCHD3Cs9duy9Q_{font-size:12px;line-height:24px;padding:4px 9px 2px;width:100%}._2QmHYFeMADTpuXJtd36LQs:hover ._31L3r0EWsU0weoMZvEJcUA{display:none}._2QmHYFeMADTpuXJtd36LQs ._31L3r0EWsU0weoMZvEJcUA,._2QmHYFeMADTpuXJtd36LQs:hover ._11Zy7Yp4S1ZArNqhUQ0jZW{display:block}._2QmHYFeMADTpuXJtd36LQs ._11Zy7Yp4S1ZArNqhUQ0jZW{display:none}._2CLbCoThTVSANDpeJGlI6a{width:100%}._2CLbCoThTVSANDpeJGlI6a:hover ._31L3r0EWsU0weoMZvEJcUA{display:none}._2CLbCoThTVSANDpeJGlI6a ._31L3r0EWsU0weoMZvEJcUA,._2CLbCoThTVSANDpeJGlI6a:hover ._11Zy7Yp4S1ZArNqhUQ0jZW{display:block}._2CLbCoThTVSANDpeJGlI6a ._11Zy7Yp4S1ZArNqhUQ0jZW{display:none} I think we are somewhere in the middle, and will hedge our bets and put contributions into both. @keyframes ibDwUVR1CAykturOgqOS5{0%{transform:rotate(0deg)}to{transform:rotate(1turn)}}._3LwT7hgGcSjmJ7ng7drAuq{--sizePx:0;font-size:4px;position:relative;text-indent:-9999em;border-radius:50%;border:4px solid var(--newCommunityTheme-bodyTextAlpha20);border-left-color:var(--newCommunityTheme-body);transform:translateZ(0);animation:ibDwUVR1CAykturOgqOS5 1.1s linear infinite}._3LwT7hgGcSjmJ7ng7drAuq,._3LwT7hgGcSjmJ7ng7drAuq:after{width:var(--sizePx);height:var(--sizePx)}._3LwT7hgGcSjmJ7ng7drAuq:after{border-radius:50%}._3LwT7hgGcSjmJ7ng7drAuq._2qr28EeyPvBWAsPKl-KuWN{margin:0 auto} I have a child starting college in the fall and I want my AGI to be as low as possible. Many residents are eager to begin saving for retirement during residency. this is false, Roth 401k means you're accepting the tax % today, the contribution … 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The Roth IRA is one of the best ways to save for retirement. More than 58 million people have one, and they held a collective $6.2 trillion as of Dec. 31, 2019, according to the Investment Company Institute. The maximum contribution for 2019 is $19,000. Tough call on your gf, she could do all Roth 401k, and not worry about the $6k for the Roth IRA or Traditional and Roth IRA. Roth vs. traditional IRA’s can be good choice for investors Whether a person chooses a Roth vs. traditional IRA, investors can sure that either retirement account will help increase wealth. Traditional vs. Roth IRA: Similarities. Buying all our clothes at Kohl’s. With that income why don't you work a little longer and build a larger retirement/brokerage fund and keep it as a retirement inheritance for children and grandchildren (if you have them later)? blogs say a traditional if you make 71,000 or less and Roth for 125,000 or less. ChillyCheese points it out. You’re very welcome. .c_dVyWK3BXRxSN3ULLJ_t{border-radius:4px 4px 0 0;height:34px;left:0;position:absolute;right:0;top:0}._1OQL3FCA9BfgI57ghHHgV3{-ms-flex-align:center;align-items:center;display:-ms-flexbox;display:flex;-ms-flex-pack:start;justify-content:flex-start;margin-top:32px}._1OQL3FCA9BfgI57ghHHgV3 ._33jgwegeMTJ-FJaaHMeOjV{border-radius:9001px;height:32px;width:32px}._1OQL3FCA9BfgI57ghHHgV3 ._1wQQNkVR4qNpQCzA19X4B6{height:16px;margin-left:8px;width:200px}._39IvqNe6cqNVXcMFxFWFxx{display:-ms-flexbox;display:flex;margin:12px 0}._39IvqNe6cqNVXcMFxFWFxx ._29TSdL_ZMpyzfQ_bfdcBSc{-ms-flex:1;flex:1}._39IvqNe6cqNVXcMFxFWFxx .JEV9fXVlt_7DgH-zLepBH{height:18px;width:50px}._39IvqNe6cqNVXcMFxFWFxx ._3YCOmnWpGeRBW_Psd5WMPR{height:12px;margin-top:4px;width:60px}._2iO5zt81CSiYhWRF9WylyN{height:18px;margin-bottom:4px}._2iO5zt81CSiYhWRF9WylyN._2E9u5XvlGwlpnzki78vasG{width:230px}._2iO5zt81CSiYhWRF9WylyN.fDElwzn43eJToKzSCkejE{width:100%}._2iO5zt81CSiYhWRF9WylyN._2kNB7LAYYqYdyS85f8pqfi{width:250px}._2iO5zt81CSiYhWRF9WylyN._1XmngqAPKZO_1lDBwcQrR7{width:120px}._3XbVvl-zJDbcDeEdSgxV4_{border-radius:4px;height:32px;margin-top:16px;width:100%}._2hgXdc8jVQaXYAXvnqEyED{animation:_3XkHjK4wMgxtjzC1TvoXrb 1.5s ease infinite;background:linear-gradient(90deg,var(--newCommunityTheme-field),var(--newCommunityTheme-inactive),var(--newCommunityTheme-field));background-size:200%}._1KWSZXqSM_BLhBzkPyJFGR{background-color:var(--newCommunityTheme-widgetColors-sidebarWidgetBackgroundColor);border-radius:4px;padding:12px;position:relative;width:auto} But like HSAs, Roth IRAs have some limitations, and you're limited on how you can use the account now. Cookies help us deliver our Services. This is a place for people who are or want to become Financially Independent (FI), which means not having to work for money. It appears that the traditional 401k would make sense with my income if I FIRE at 35 and do a Roth Conversion. Has no children and expects to live until 90 years old 2. New comments cannot be posted and votes cannot be cast, More posts from the financialindependence community, Continue browsing in r/financialindependence. You might even want to have BOTH! Their appeal: A 401(k) plan offers a tax-advantaged way to save for retirement, making it easier for you to roll up some dough for the future. Press question mark to learn the rest of the keyboard shortcuts. You could use that to max out a Trad IRA and then backdoor convert to Roth. By using a Roth over traditional, with your income and marital status, every dollar in the Roth is being hit with a 32-35% tax, depending on where your income ends up falling in the range you listed. Thanks everyone for your help. Taxes The main difference between the Roth 401(k) and the traditional is when the money is taxed. If a person wants to choose the best stock for retirement account investment, they … Return to main page. - … baulrich May 30, 2014, 12:23 pm. I switched it over to t401k last night. It was definitely frustrating as a teenager but in hindsight, the frugal choices they made not only taught me good spending habits but also meant we lived in a better school district than we could’ve otherwise afforded. Our plan is when we retire to do the roth ira laddering. What Is a Traditional 401(k)? The investment … Like to hear some ideas on the matter. One important distinction about Roth IRAs (although not Roth 401(k) accounts) is that they are not subject to required minimum distributions (RMDs) during the lifetime of the account owner, while traditional IRAs are. Invests $30,000 per year into taxable investing account 7. Pros . You are pretty much the prototypical high earner/early retiree for whom the 401k was designed. Backdoor Roth contributions when we were over the limit — In the years when we were over the limit, we never even seriously considered taking advantage of the backdoor Roth option: contributing after-tax dollars to a traditional IRA (and getting no tax benefit), and then converting those dollars to a Roth … For people retiring at a traditional age, it seems Roth makes more sense. Plus the Traditional would still be better even with equal incomes. Traditional . If you are age 50 or over, the catch-up contribution is additional $6,000 in 2019. very few people consider that with ROTH 401k you can contribute more than with traditional 401K. BTW, read up on back door Roth IRA. ROTH IRA VS 401K // Pros & cons of each, and how to choose one over the other. I think what she’s doing with traditional 401k and Roth IRA is but it is a toss up with going Roth on both. You fund Roth IRAs and Roth 401(k)s with after-tax dollars. Your earnings grow tax-free, and qualified withdrawals are tax-free. Although everyone says that it depends on tax rates now vs retirement, please remember the other huge advantage of a Roth 401k. Roth 401(k) vs. Roth IRA: What Are They? Makes $60,000 per year 3. Invests in a 75% stocks/25% bonds portfolio of l… I’ve been aware of the trade offs, but you summarized the pros and cons of traditional vs Roth so elegantly! Sorry, this post was deleted by the person who originally posted it. I've done quite a bit of research, looked at this subreddits FAQ's, blogs (MMM, MF, etc.) Your contributions are not tax-deductible for either a Roth 401(k) or a Roth IRA. So you get no tax-break upfront as you would with a traditional 401(k) or IRA. ._1PeZajQI0Wm8P3B45yshR{fill:var(--newCommunityTheme-actionIcon)}._1PeZajQI0Wm8P3B45yshR._3axV0unm-cpsxoKWYwKh2x{fill:#ea0027} By fighting for your financial freedom, you can begin to control your own destiny. I have done several articles in the past about the Roth vs Tax-deferred 401(k) contribution dilemma.If you haven't read any of them, you should start there before reading this article. Income will likely increase by 10-15% annually. Employers and employees both make contributions to … With traditional, most early withdrawals will trigger a 10% penalty. That’s what you’re facing here. Traditional contributions to a retirement account are tax-deductible when you make the contribution to the account, and taxed when withdrawn. 403(b) vs. Roth IRA: An Overview . By using a Roth over traditional, with your income and marital status, every dollar in the Roth is being hit with a 32-35% tax, depending on where your income ends up falling in the range you listed. Currently at around $160k NW. A traditional 401(k) has the advantage of more options later on, but a Roth may be the smarter choice for big savers. Reply. Regarding your fears for future expenditures, in my experience growing up in the suburbs with frugal parents, it was all the keeping up with the Joneses that caused people to stray from their goals. The Grounded Engineer. A Testimonial: "A wonderful book that tells its readers, with simple logical explanations, our Boglehead Philosophy for successful investing." I'm 28 now and want to start investing in it again. Traditional. However, I wanted to seek validation here before I update my 401k account. Which 401k … At its core, FI/RE is about maximizing your savings rate (through less spending and/or higher income) to achieve FI and have the freedom to RE as fast as possible. Or maybe you’ll want both! ._2a172ppKObqWfRHr8eWBKV{-ms-flex-negative:0;flex-shrink:0;margin-right:8px}._39-woRduNuowN7G4JTW4I8{border-top:1px solid var(--newCommunityTheme-widgetColors-lineColor);margin-top:12px;padding-top:12px}._3AOoBdXa2QKVKqIEmG7Vkb{font-size:12px;font-weight:400;line-height:16px;-ms-flex-align:center;align-items:center;background-color:var(--newCommunityTheme-body);border-radius:4px;display:-ms-flexbox;display:flex;-ms-flex-direction:row;flex-direction:row;margin-top:12px}.vzEDg-tM8ZDpEfJnbaJuU{color:var(--newCommunityTheme-button);fill:var(--newCommunityTheme-button);height:14px;width:14px}.r51dfG6q3N-4exmkjHQg_{font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;display:-ms-flexbox;display:flex;-ms-flex-pack:justify;justify-content:space-between}._2ygXHcy_x6RG74BMk0UKkN{margin-left:8px}._2BnLYNBALzjH6p_ollJ-RF{display:-ms-flexbox;display:flex;margin-left:auto}._1-25VxiIsZFVU88qFh-T8p{padding:0}._3BmRwhm18nr4GmDhkoSgtb{color:var(--newCommunityTheme-bodyText);-ms-flex:0 0 auto;flex:0 0 auto;line-height:16px} Often, they will have a choice between traditional and Roth retirement accounts. Not sure if this logic makes sense, but seems to me that if you are maxing a ROTH you are effectively saving more. ._3-SW6hQX6gXK9G4FM74obr{display:inline-block;vertical-align:text-bottom;width:16px;height:16px;font-size:16px;line-height:16px} [Editor's Note: Today's guest post was submitted by Dr. Thomas Bomberger, a PGY2 Diagnostic Radiologist at Case Western Reserve University School of Medicine.As a 4th-year medical student, Dr. Bomberger took a deep dive into the question of REPAYE vs PAYE/MFS for residents married to a working, debt-free spouse. But when you withdraw money after you retire, you owe zero taxes on that money. Additionally, while not Roth related, you can make tax exempt contributions in addition to your Roth contributions to $55,000 per year (2018) to a pre-tax TSP account while deployed. You guys are doing a lot of planning about being married and acting like you already are without any of the legal protections of actually being married. In summary: Traditional (pre-tax): tax-deferred savings, where taxes are paid upon withdrawal. Tax breaks for contributing, eit… It has so much flexibility and use it while you can. The rest of my money is going into after tax contributions in my 401k for a mega-back door Roth IRA but as I was reviewing everything I started to wonder if traditional or Roth … This is an excellent post, POF. I think Roth is a great idea for younger folks. Not buying a vacation house. Compare broker retirement account fees, commissions, and offerings. I'm trying to figure out what would make the most sense between the two. Traditional 401k, no question. The most important consideration in the Roth vs Traditional 401(k) debate is your tax rate and how it will change when you retire. The Traditional vs. Roth Decision for Medical Residents. Overview of Vanguard vs Fidelity For IRA Investors who want good value in brokerage services often turn to Fidelity or Vanguard. The Four Factors Of Roth Vs Traditional IRA. However, I was raised to fight for everything I've had and I would prefer to instill those same values to the future family. Qualifying exceptions to the penalty tax . A Testimonial: "A wonderful book that tells its readers, with simple logical explanations, our Boglehead Philosophy for successful investing." That being said, would you believe a t401k would be the best option? Future greater than current marginal tax bracket favors Roth. Resides in a state with no state income tax 4. Touche, that'll be a nice game to win! With a $17,500 contribution to the Roth 401k rather than the Traditional 401k, the family would pay an additional $2,502 in tax, an effective tax rate of 14.3%. Press J to jump to the feed. If a parent leaves you an IRA, you are … Essentially, you don’t want ‘runaway investment balances’ in your traditional account, but are happy if it occurs in a Roth. There are only four factors that impact the wealth outcome when choosing between a Roth or traditional IRA (or other retirement account). Welcome. Don’t contribute to a traditional IRA except when doing backdoor. 43 thoughts on “Traditional TSP vs. Roth TSP” Rick says: April 2, 2014 at 5:56 pm . Another aspect is the more subtle difference between a Roth and a Traditional IRA. A mega backdoor Roth lets people save as much as $37,500 in a Roth IRA or Roth 401(k) in 2020. These large firms are known to provide reliable investment assistance at reasonable cost. .Rd5g7JmL4Fdk-aZi1-U_V{transition:all .1s linear 0s}._2TMXtA984ePtHXMkOpHNQm{font-size:16px;font-weight:500;line-height:20px;margin-bottom:4px}.CneW1mCG4WJXxJbZl5tzH{border-top:1px solid var(--newRedditTheme-line);margin-top:16px;padding-top:16px}._11ARF4IQO4h3HeKPpPg0xb{transition:all .1s linear 0s;display:none;fill:var(--newCommunityTheme-button);height:16px;width:16px;vertical-align:middle;margin-bottom:2px;margin-left:4px;cursor:pointer}._1I3N-uBrbZH-ywcmCnwv_B:hover ._11ARF4IQO4h3HeKPpPg0xb{display:inline-block}._2IvhQwkgv_7K0Q3R0695Cs{border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._2IvhQwkgv_7K0Q3R0695Cs:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B{transition:all .1s linear 0s;border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._1I3N-uBrbZH-ywcmCnwv_B:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B.IeceazVNz_gGZfKXub0ak,._1I3N-uBrbZH-ywcmCnwv_B:hover{border:1px solid var(--newCommunityTheme-button)}._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk{margin-top:25px;left:-9px}._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:focus-within,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:hover{transition:all .1s linear 0s;border:none;padding:8px 8px 0}._25yWxLGH4C6j26OKFx8kD5{display:inline}._2YsVWIEj0doZMxreeY6iDG{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-metaText);display:-ms-flexbox;display:flex;padding:4px 6px}._1hFCAcL4_gkyWN0KM96zgg{color:var(--newCommunityTheme-button);margin-right:8px;margin-left:auto;color:var(--newCommunityTheme-errorText)}._1hFCAcL4_gkyWN0KM96zgg,._1dF0IdghIrnqkJiUxfswxd{font-size:12px;font-weight:700;line-height:16px;cursor:pointer;-ms-flex-item-align:end;align-self:flex-end;-webkit-user-select:none;-ms-user-select:none;user-select:none}._1dF0IdghIrnqkJiUxfswxd{color:var(--newCommunityTheme-button)}._3VGrhUu842I3acqBMCoSAq{font-weight:700;color:#ff4500;text-transform:uppercase;margin-right:4px}._3VGrhUu842I3acqBMCoSAq,.edyFgPHILhf5OLH2vk-tk{font-size:12px;line-height:16px}.edyFgPHILhf5OLH2vk-tk{font-weight:400;-ms-flex-preferred-size:100%;flex-basis:100%;margin-bottom:4px;color:var(--newCommunityTheme-metaText)}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX{margin-top:6px}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._3MAHaXXXXi9Xrmc_oMPTdP{margin-top:4px} She needs to decide on her own what her retirement goals and dreams are and then save based on what is the best financial moves for that plan. Both 403(b) plans and Roth IRAs are vehicles designated for use in retirement planning. Traditional —I don’t understand the difference.” However your employees phrase it, one thing is clear: The decision to save in a Traditional 401(k), a Roth 401(k), or both is a difficult one. Happily lives off of $1,400 per month ($16,800 per year) 5. Fidelity Investments vs Vanguard for IRA accounts, Roth IRA, Rollover, SEP, SIMPLE. In other words, if you’ve got $1 million in there and $900,000 of it is growth and you get taxed on that, the taxes are $300,000. The money in your TSP will grow tax-deferred, and you will pay taxes on your contribution and their earnings upon withdrawal in retirement. Plans to utilize a 4% withdrawal rate(adjusted annually for inflation) during retirement 8. .LalRrQILNjt65y-p-QlWH{fill:var(--newRedditTheme-actionIcon);height:18px;width:18px}.LalRrQILNjt65y-p-QlWH rect{stroke:var(--newRedditTheme-metaText)}._3J2-xIxxxP9ISzeLWCOUVc{height:18px}.FyLpt0kIWG1bTDWZ8HIL1{margin-top:4px}._2ntJEAiwKXBGvxrJiqxx_2,._1SqBC7PQ5dMOdF0MhPIkA8{height:24px;vertical-align:middle;width:24px}._1SqBC7PQ5dMOdF0MhPIkA8{-ms-flex-align:center;align-items:center;display:-ms-inline-flexbox;display:inline-flex;-ms-flex-direction:row;flex-direction:row;-ms-flex-pack:center;justify-content:center} John Grobe, Federal Career Experts. Traditional 401(k): Kate earns $100 which she contributes directly into her traditional 401(k) without paying any income taxes. I do blend my 401k with a majority traditional (~$14k) and minority Roth … I make about the same as your girlfriend and that’s exactly how I do it. I've thought about it. Financial Independence is closely related to the concept of Early Retirement/Retiring Early (RE) - quitting your job/career and pursuing other activities with your time. Everyone loves to spoil children but resisting will keep you on track. ._9ZuQyDXhFth1qKJF4KNm8{padding:12px 12px 40px}._2iNJX36LR2tMHx_unzEkVM,._1JmnMJclrTwTPpAip5U_Hm{font-size:16px;font-weight:500;line-height:20px;color:var(--newCommunityTheme-bodyText);margin-bottom:40px;padding-top:4px}._306gA2lxjCHX44ssikUp3O{margin-bottom:32px}._1Omf6afKRpv3RKNCWjIyJ4{font-size:18px;font-weight:500;line-height:22px;border-bottom:2px solid var(--newCommunityTheme-line);color:var(--newCommunityTheme-bodyText);margin-bottom:8px;padding-bottom:8px}._2Ss7VGMX-UPKt9NhFRtgTz{margin-bottom:24px}._3vWu4F9B4X4Yc-Gm86-FMP{border-bottom:1px solid var(--newCommunityTheme-line);margin-bottom:8px;padding-bottom:2px}._3vWu4F9B4X4Yc-Gm86-FMP:last-of-type{border-bottom-width:0}._2qAEe8HGjtHsuKsHqNCa9u{font-size:14px;font-weight:500;line-height:18px;color:var(--newCommunityTheme-bodyText);padding-bottom:8px;padding-top:8px}.c5RWd-O3CYE-XSLdTyjtI{padding:8px 0}._3whORKuQps-WQpSceAyHuF{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-actionIcon);margin-bottom:8px}._1Qk-ka6_CJz1fU3OUfeznu{margin-bottom:8px}._3ds8Wk2l32hr3hLddQshhG{font-weight:500}._1h0r6vtgOzgWtu-GNBO6Yb,._3ds8Wk2l32hr3hLddQshhG{font-size:12px;line-height:16px;color:var(--newCommunityTheme-actionIcon)}._1h0r6vtgOzgWtu-GNBO6Yb{font-weight:400}.horIoLCod23xkzt7MmTpC{font-size:12px;font-weight:400;line-height:16px;color:#ea0027}._33Iw1wpNZ-uhC05tWsB9xi{margin-top:24px}._2M7LQbQxH40ingJ9h9RslL{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-actionIcon);margin-bottom:8px} One key difference between them is eligibility. Regardless of which plan you choose, 401(k) plans have some things in common. Both 403(b) plans and Roth IRAs are vehicles designated for use in retirement planning. We came up with our own FIRE journey goals, they just happened to sync. - Taylor Larimore, author of The Bogleheads' Guide to Investing. Driving Toyotas until they died. One advantage of Roth IRAs: you can withdraw up to the amount you contributed at any time penalty-free. The most important consideration in the Roth vs Traditional 401(k) debate is your tax rate and how it will change when you retire. If you go Trad 401k, you'd get that 32-35% back as part of your take home pay. So the growth being tax-free by it being in a Roth TSP is excellent. This is one of the biggest differences between Roth and traditional IRAs. This is an outright benefit for Roths, compared to the traditional IRA that slowly self-liquidates from RMDs, forcing money into taxable accou… When you invest in a Roth account, you pay with after-tax dollars. You might even want to have BOTH! Roth vs. Roth IRAs are a personal retirement planning vehicle that … ._1x9diBHPBP-hL1JiwUwJ5J{font-size:14px;font-weight:500;line-height:18px;color:#ff585b;padding-left:3px;padding-right:24px}._2B0OHMLKb9TXNdd9g5Ere-,._1xKxnscCn2PjBiXhorZef4{height:16px;padding-right:4px;vertical-align:top}._1LLqoNXrOsaIkMtOuTBmO5{height:20px;padding-right:8px;vertical-align:bottom}.QB2Yrr8uihZVRhvwrKuMS{height:18px;padding-right:8px;vertical-align:top}._3w_KK8BUvCMkCPWZVsZQn0{font-size:14px;font-weight:500;line-height:18px;color:var(--newCommunityTheme-actionIcon)}._3w_KK8BUvCMkCPWZVsZQn0 ._1LLqoNXrOsaIkMtOuTBmO5,._3w_KK8BUvCMkCPWZVsZQn0 ._2B0OHMLKb9TXNdd9g5Ere-,._3w_KK8BUvCMkCPWZVsZQn0 ._1xKxnscCn2PjBiXhorZef4,._3w_KK8BUvCMkCPWZVsZQn0 .QB2Yrr8uihZVRhvwrKuMS{fill:var(--newCommunityTheme-actionIcon)} Traditional 401(k) vs. Roth 401(k) walkthrough. 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