Is there a benefit to having both a 401k and a Roth IRA?
Not sure if I should have both accounts or just one
SW-User
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LamontCranston · M
LamontCranston · M
@LamontCranston @SW-User If you are in a low tax bracket, a tax deduction for 401K contribution won't do much for you and you may be in a higher tax bracket years in future when you are withdrawing the funds and paying the taxes on withdrawal.
Meanwhile the Roth contribution will compound tax free and not be subject to tax when you withdraw.
The calculus may change if you are in high income (high tax) years when the current deduction will be beneficial.
Meanwhile the Roth contribution will compound tax free and not be subject to tax when you withdraw.
The calculus may change if you are in high income (high tax) years when the current deduction will be beneficial.
SW-User
@LamontCranston gotcha, i dont make much money and have both accounts, 401k I have a few thousand in there but the roth IRA I have is fairly new
LamontCranston · M