Roth 401k vs 401k vs Roth IRA - What's the BEST?

[@humphrey]

Do you have a Roth IRA, 401k or Roth 401k? Let me know your thoughts below! Look forward to hearing from you. You guys rock 👊

[@kristinaperrin2699]

I have a 401a and 457 because I'm a government employee. My rate of return has been amazing! Mostly invested in vanguard index funds with others mixed in

[@sn-1210]

I just wanted to say that you’re really doing an amazing thing by promoting investing and teaching young people about finance. You’re making peoples lives better!

[@humphrey]

ty Sahil :D I appreciate the comment

[@QuickPLFMA]

Humphrey, thank you so much for this video! The difference between Regular 401, Roth 401, and Roth IRA has been so confusing

[@markpescatrice9783]

I have a Roth IRA, 403(b), and Roth 403(b), among other types of accounts (529 and Coverdell). Thanks for the video, as this helps my wife understand the priorities for her retirement saving strategy.

[@heatherleslie6643]

Hi! Saw you on ifunny! I have 2 Roth IRAs. One with Northwestern Mutual and one with Vanguard... both maxed. I plan to max out my Roths every year, and I’m really liking the Vanguard app. I’ve also got a few shares of the Vanguard Total Stock Market and I’m pleased. I’m blessed to be young with a good paying job, so I’m trying to set myself up for the future! I’m subscribed!!

[@humphrey]

Noted! Thank you for the comment heather :)

[@gudboyking]

Both Roth IRAs maxed? We can only contribute $6000/year right? Can you explain the contributions to each roth IRA

[@jackmack276]

How much do you allocate to each since max is 6k? Do you split even or weight heavier to the better performing fund?

[@jjrocks24]

Isn't that illegal? Having two fully vested Roth IRAs is not kosher. Unless you split up the contribution limit between both.

[@heatherleslie6643]

@@jjrocks24 nah, they are from separate years. 2018 was put into NW mutual, and 2019 was put into Vanguard. Thankfully the app/website won’t let you double dip.

[@aliakca4487]

first comment man feels good your so big, like congrats, thanks for the awsome info your the best!

[@humphrey]

dude thank you man, appreciate it.

[@aliakca4487]

@@humphrey np

[@be.soreal]

This video is pretty sick ngl, thanks Humphrey !!! :D

[@shepherds_grandma]

I wish my employer matched. They do offer some cash for my HSA. I have only had it for a year but was able to invest it. It has done pretty well for such a little bit of money.

[@humphrey]

That's still good to hear though :)

[@alisonwalker8414]

Great video, I have worked all my life without thinking about my retirement. Now my kids are growing fast, the way I am spending my savings, it has come to my attention that at my old age, I will have no jobs, no money left and no retirement funds to fall back to. So I am asking what do I need to do and how do I begin investing in my retirement. I just need professional advice. Thanks.

[@alisonwalker8414]

Could you please refer me to your expert, I will like to look him up.

[@alisonwalker8414]

Could you please provide me with her contact details? Thanks.

[@alisonwalker8414]

I looked up her name as instructed, I found her business contact. I sent her an email her already. Thanks.

[@steves3234]

I work in payroll consulting and never have seen a company match 2 dollars for 1 contributed

[@apsacardservices]

Thank you for the explanation

[@justinelliott2000]

Well done Yang

[@humphrey]

thank u

[@adrianrdgz6838]

Thank you.

[@humphrey]

You're welcome! :D

[@krakken11354]

I have a regular 401k. I figure when I when I retire, I will be in a lower tax bracket since I won’t be working and just take the RMD.

[@humphrey]

That makes sense :) I plan to be working for awhile, just because I enjoy working I think, LOL

[@ibob148]

I have both. The traditional 401k seems better to me. I think it really depends on a lot of factors. I'm want to figure out a strategy for how much to put in each. I haven't seen anything online that helps figure that out.

[@pokerforpoundpups]

Very helpful - thank you!

[@logicalparadox2897]

You mentioned that contributions grow tax free in the Roth. And dimension the huge tax bill with tax deferred when you go to withdraw. I do agree that looking at the number in an account, and then having to factor in taxes is less ideal than having a number that you know is yours to spend. That said, can you please explain to me how the end result is any different otherwise? Yes you'll have a huge tax bill if you do tax deferred when you go to withdrawal. But won't you also have a huge difference in growth because the money you would have spent on taxes went in there along with your investment to compound. So if you take $100 it doesn't matter if you take $25 off the top and then put it in to let it grow 8% per year or if you put the whole hundred dollars in and let it grow 8% per year for the same amount of time and then take the 25% of that bigger number. Either way your number should be the same.

[@charliev1488]

This is solid content! I was wondering if there are websites or books that goes more on depth with overall general finance? I read the Tony Robbins book Money Money Master the Game already but I doubt that's all you need.

[@humphrey]

i always like reading reddit.com/r/personalfinance and reddit.com/r/investing for fun

[@charliev1488]

@@humphrey appreciate it boss!

[@ultrazeldagamer]

can you do a video on each one going into more depth? 😅

[@humphrey]

I can definitely consider it in the future!! :D Thanks for the suggestion

[@omrajmehta5701]

From the UK, unfortunately. But still interesting info 👌🏽.

[@humphrey]

Thanks for watching anyway :D Next video will encompass everyone .

[@Mariomario-gt4oy]

I'm curious what do you think of the current stock market? Too overvalued? Too bullish? Thanks!

[@humphrey]

I personally think it's a little high right now, and I don't really understand how it's so high given our economy... But then again, no one does haha

[@phillipellingson8556]

Hi Humphrey. I will be leaving my company soon. I have contributed to both 401k and a Roth 401k. I'm going to roll them over to Fidelity. So I would need to create a RO IRA and RO Roth IRA?

[@bishopb09]

All your videos have been very beneficial . My question is I have a retirement through my job which is a state pension. My job allows us to also put into a 457b and roth IRA both have no work contribution from work. Right now I put evenly into both, but should I be putting more into one. What our your thoughts?

[@amapolacardenas6068]

Enjoyed watching your videos! Humphrey, any suggestion where to put my $ once i Maxed out 19,500 to my 401-k? Btw, I already contributed 6,000 to my Roth IRA for 2021. Thank You!

[@alrocky]

Is that $19,500 in your traditional 401(k) or $19,500 in your Roth 401(k)?

[@152tp]

I have a 401k from an old employer. Should i roll over to new employer or open a new account if the new employer has a better deal, i.e. company match

[@alrocky]

If your current 401(k) has good investment choices and low fees its okay to move your old 401(k) to your current 401(k) otherwise move it to traditional IRA.

[@152tp]

Ok, thank you for responding.

[@justinbrown7239]

How do I find out if a previous employer set up a 401K for me? Ive tried a few online search engines and had no luck. Keep up the excellent work, and Thank You! You have helped me get a grip on my personal and business finances.

[@NekoMableFan]

so just wondering-- if I were to join my company's 2 year rotational program as a full time position, and the company doesn't contribute to 401k until 1 year into employment, and I'm not sure whether I want to stay with the company after 2 years, is it worth starting my 401k with the company?

[@humphrey]

You can always just start it and roll it over to your new employer, I'd say it's still worth it if you get a match for 1 out of the 2 years. If you can't get the match, then maybe forgo it for the Roth IRA instead until you find an employer who has a better matching program/benefit.

[@lomawatts3446]

When you do pretax 401k with your employer do you still pay the federal tax for social security/fica on that money or that figures after

[@humphrey]

Hi Loma, Pre-tax 401(k) contributions are exempt from federal income taxes, state income taxes, and local income taxes!

[@krakken11354]

When you take money out from pre-tax 401k, when you retire they will give you a 1099-R tax form. That will be taxed at your ordinary rates.

[@joannalee1941]

I currently have a traditional 401K from my old employer. Would it be better to roll this over to my new employers 401K, roth 401K, or start a Roth IRA? I assume I would have to pay taxes if I roll this over to either a ROTH IRA or ROTH 401K. Also if my company is providing a 6% match, since all matches are pre-tax is it still better to make these contributions to a Roth 401k or should I stick with a traditional 401K until 6%? Thank you!

[@humphrey]

The easiest would be to roll it over to a traditonal 401k again. If you choose the Roth rollover, it is a different strategy. I think it really depends on where you're going to be when you retire. Do you anticipate working past retirement age? If so then a Roth could be a great option to do. I always suggest getting the match no matter what so get the match via the traditional and then you can think about whether or not to contribute to the Roth 401k.

[@alrocky]

@ *J* *Lee* If you are happy with the investment options in the old 401(k) you can leave it there. If you prefer the investing options in the current 401(k) and or wish to consolidate your accounts, transfer the old 401(k) to the current 401(k). If the investing options in the current 401(k) are so so or you wish more control over your money transfer the old 401(k) to a traditional IRA. . You most likely will not be able to roll the old 401(k) to your current company's Roth 401(k). If you: old 401(k) to t-IRA to Roth IRA you will pay tax on the amount. The company match really has nothing to do with whether or not you should select traditional 401(k) or Roth 401(k). Are you in a relatively high or low tax bracket? Making less than $40k a year (12% Federal Tax Bracket)?

[@leroybanks9365]

Hello my tsp plan is invested in 69/31 c/s. I was wanting to get it to like 80/20. It is better to move the shares around or just like now I am investing 100% into the c and just let time balance it to 80/20? Thanks

[@wildwolf405]

Hi, im 16 and obviously cant really do any investing or anything like that. Are there things i can do now to ensure/assist financial stability in the future right now?

[@humphrey]

Save as much as you can, start some side hustles and learn to figure out how to make income, especially in your community. When you turn 18 you'll have a bunch of options available to you!

[@MrJLD01]

I am 19 and wanting to learn personal finance. I have started watching your videos and read books by Eric Tyson. What are some of your recommendations for who/where I can go for more information as a beginner?

[@humphrey]

I really enjoy reading reddit.com/r/personalfinance!

[@MrJLD01]

@@humphrey Thank you for the recommendation!

[@kmng3207]

I have looked every direction to open a "Roth 401(K)" I am self employed.. Who - where has them .Fidelity has articles however does not offer. Any help appreciated.TY

[@alrocky]

Secure 2.0 allows Sep Roth IRA and Simple Roth IRA

[@TbL-mo2]

I started a Roth IRA years ago when I was making under the limit. It has about $30,000 in it, however, I had to stop contributing when my income increased above the limit. My question is, what should I do with that account? Just leave it and let it grow?

[@alrocky]

Are you familiar with back door Roth IRA? Are you contributing to 401(k)?

[@TbL-mo2]

@@alrocky no I’m not sure what a back door Roth is but yes, I also have a 401k

[@alrocky]

@@TbL-mo2 Anyone with (or who's spouse has) earned income (a job) may contribute to non-deductible traditional IRA. Traditional IRA may be converted to Roth IRA. So if you are over the income limit to *_directly_* contribute to Roth IRA, you contribute $6,500 to traditional IRA and convert that $6,500 t-IRA to $6,500 [back door] Roth IRA. This process is tax free unless you have traditional IRA balance from prior years which results in *_pro rata_* taxes. If you have old t-IRA balance you can move that t-IRA to your 401(k) and perform back door Roth without tax consequences. Fill Complete Form 8606 for this type Roth IRA.

[@alexp6220]

Great video. Very informative. You can still have a Roth if you're above the income limit. Open up as a traditional and transfer it to an IRA. A good financial advisor can make this happen pretty painlessly.

[@alrocky]

"Open up as a traditional and transfer it to an [sic] [ *Roth* ] IRA." No advisor needed.

[@mitchellrosales8350]

Can you have a Roth 401 k and a Roth IRA set up at the same time ??

[@alrocky]

yes

[@nuchalrigidity1677]

My employer matches 6%. What would be the best split between the trad 401k and Roth 401k? Do you recommend 3% each?

[@humphrey]

I'm pretty sure employer match is always pre-tax dollars, so then after that I personally like having it all in the Roth.

[@codyallen1227]

when you roll over a 401k into a roth ira, do you only pay taxs on the money you moved or now do you pay on taxs on everything in your roth ira when you pull it?

[@alrocky]

The amount you converted from the traditional 401(k) to Roth IRA is subject to tax. Roth IRA withdrawals at retirement are not subject to tax.

[@bcfmef]

When you withdraw from either 401k & 401Roth , don’t you have to pay out an additional tax when you file for income taxes, since you are adding money to your income ?

[@alrocky]

Withdrawals from Roth 401(k) at retirement are not taxable.

[@nathanieljackson65]

So I should get both a Roth IRA and a 401k (or roth 401k) and try to max out both for each year ??

[@HolaStallvito]

Does contributing to my Roth 403b affect my contribution limit to my Roth IRA? Thank you!

[@kyliefan7]

Am I always able to roll my regular 401k into a Roth? I was maybe going to move some of it each year.

[@alrocky]

Do you mean to ask about rolling traditional 401(k) to Roth 401(k) or to Roth IRA?

[@QuickPLFMA]

What if you have two full-time jobs that offer Roth 401k? Is the limit still $19,500? Thank you!

[@alrocky]

You may contribute maximum $22,500 annually regardless of how may jobs you have. Per year not per job.

[@charylovalle1153]

If you have the option, would you put your 401k or roth 401k into an index fund?

[@labhita1]

Is it 6000 for max contribution or 19500? Is there a max cap for Roth?

[@alrocky]

401(k) = $19,500 IRA = $6,000

[@ChubbyMonkeys]

Hey Humphrey, can I open my own Roth 401K, or does my employer have to offer this?

[@alrocky]

Your employer needs to offer a Roth 401(k). If you only offer a traditional 401(k) you should petition them to offer a Roth 401(k). Are you self employed?

[@ryanpamperin4439]

You do pay taxes on the gains with the roth 401k correct?

[@alrocky]

Q1 No, incorrect. Withdrawals from Roth 401(k) at retirement are tax free.

[@Danny-db9du]

@@alrocky even the employer match portion of it ?

[@alrocky]

@@Danny-db9du Your employer match goes toward your traditional 401(k) balance. That portion is taxed upon withdrawal.

[@hananiahpierre-louis1066]

I try to use the full amount you are allow to contribute and split it between 401k and Roth 401k plan at work. Now that I already max out my Roth 401k plan, am I still able to open a Roth IRA on a medium like acorns and contribute up to 6k on that? Or would I subject myself to penalties?

[@alrocky]

50 50 split traditional 401(k) Roth 401(k) is not ideal tax wise. You can contribute $20,500 to your 401(k) and $6,000 to your IRA.

[@ASchmidy]

Who is Roth, anyway?

[@Rommie26]

When you say max out? Do you mean you can only contribute a certain amount every year? For example: you can only contribute 5k to your 401k every year?

[@MattFuss66]

Good info , just talks to fast

[@humphrey]

Sorry about that

[@WanderleiSilva29]

3:00…. Too much faith in our government with that statement….