Q. Of all the retirement plan options - Roth IRA, 401K, regular IRA, Roth 401K, which one is the best?
A. The conventional answer is it depends, for example, if your current tax rate is lower than retirement time tax rate, then Roth 401K or Roth IRA is better.
However, a recent T.Rowe Price study has a surprising finding - Roth IRA is the best retirement plan, for people of all ages! Of course, if you are still eligible for Roth IRA, by all means do it first.
This finding may sound a little counter-intuitive, but as many financial decisions you need to make, it's best to let numbers talk and do the comparisons.
We will follow up with a financial model next blogpost to test if Roth 401K truly is the best option, or not.
A. The conventional answer is it depends, for example, if your current tax rate is lower than retirement time tax rate, then Roth 401K or Roth IRA is better.
However, a recent T.Rowe Price study has a surprising finding - Roth IRA is the best retirement plan, for people of all ages! Of course, if you are still eligible for Roth IRA, by all means do it first.
This finding may sound a little counter-intuitive, but as many financial decisions you need to make, it's best to let numbers talk and do the comparisons.
We will follow up with a financial model next blogpost to test if Roth 401K truly is the best option, or not.
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