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<blockquote data-quote="raceanoncr" data-source="post: 273345" data-attributes="member: 6408"><p>There's advantages to both Roth and 401. Roth is after tax. 401 is before tax. What's that mean? </p><p> </p><p>When you are retired and start drawing out 401, as is required, you will be taxed then. Probably your tax rate will be much lower than it is now. Also, you can stash up to $15,000 (I think) this yr. Would have to look to be sure, but I max it out every yr anyway. </p><p> </p><p>With the Roth, in most cases, you can only invest $4,000 a yr, unless you're over 50, then it't bumped to $5,000. This is after tax contribution, which means you've already been taxed on it, you don't get taxed again. Also, you don't get taxed on the growth during its life. My advisor simplified this: The IRS figgered they screw us enough as it is, they'd let us have all this. </p><p> </p><p>Stock, as you can see, ain't been so hot. Today, is around 73 and has been for some time. Sure, you can re-invest dividends but @0.42 cents a share, it takes awhile to make a difference. </p><p> </p><p>My advice: Max out the 401 and Roth and whatever options you have.</p></blockquote><p></p>
[QUOTE="raceanoncr, post: 273345, member: 6408"] There's advantages to both Roth and 401. Roth is after tax. 401 is before tax. What's that mean? When you are retired and start drawing out 401, as is required, you will be taxed then. Probably your tax rate will be much lower than it is now. Also, you can stash up to $15,000 (I think) this yr. Would have to look to be sure, but I max it out every yr anyway. With the Roth, in most cases, you can only invest $4,000 a yr, unless you're over 50, then it't bumped to $5,000. This is after tax contribution, which means you've already been taxed on it, you don't get taxed again. Also, you don't get taxed on the growth during its life. My advisor simplified this: The IRS figgered they screw us enough as it is, they'd let us have all this. Stock, as you can see, ain't been so hot. Today, is around 73 and has been for some time. Sure, you can re-invest dividends but @0.42 cents a share, it takes awhile to make a difference. My advice: Max out the 401 and Roth and whatever options you have. [/QUOTE]
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