No. of Recommendations: 0
I have budgeted $6,000 per year for retirement savings. It is currently all going into my 401(k), and I contribute about
twice as much as I need to in order to receive the maximum matching contribution from my employer.

Would it make more sense to contribute $2,000 per year to my Roth IRA and only contribute $4,000 to my 401(k)? I
will still get the full employer match.

In other words, which is better: lowering my current taxes through higher 401(k) contributions or paying higher taxes
now and maximizing my Roth IRA contributions?

I am not planning to retire for at least 40 years.



First I would put 2000 in an IRA since you do not lose anything in the 401k. That gives you more controll over the investment. You do lose the ability to borrow and the earlier retirement age but I would still go for the IRA.

Next I would go for the ROTH. One benefit is that you can take your 2000 out without penality.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement