Both 401(k)s and IRAs come in two flavors—Roth and traditional—and choosing the right option could mean saving you thousands of dollars in taxes over time. In this video, learn how to make an educated decision regarding how to incorporate Roth and/or traditional accounts into your retirement plan.
- Whether you're saving through an employer sponsored plan … or in your own IRA, you might be wondering … whether it makes more sense to save … in a Roth account or a traditional account. … In this lesson, I'll walk you through the differences … between Roth and traditional accounts and help you … determine which one might be the best fit for you. … The main difference … between traditional and Roth contributions … to a retirement account is when you get your tax benefits. … With a traditional account, whether it's a traditional 401K … or a traditional IRA, you have the opportunity … to make tax deductible contributions. … That means that you don't have to pay income tax … on the money that you contribute … to your traditional retirement account. … So if you make a 100,000 annually … and you contribute 10,000 to your 401k at work this year, … you'll only have to pay income tax … on $90,000 of your income. … This example is a bit oversimplified … but you get the idea. … Down the line when you take money out …
This course was created by Madecraft. We are pleased to host this training in our library.