Roth 401k vs. Traditional 401k - How Will You Retire Richer?

[@MinorityMindset]

Thank you for watching! If you enjoyed this video, you should watch - The TRUTH About Your 401k That No One Tells You: kzbin.info/www/bejne/aorHnZamrdt5bMU

[@MyGreenNest]

Minority Mindset didn’t see any videos linked below

[@dayonebullzkennel]

Minority Mindset can you make a video on steps to doing a chapter 7 bankruptcy . To fix your credit score. Thanks Minority Mindset

[@dayonebullzkennel]

Minority Mindset can you make a video on steps you should take after filing chapter 7 bankruptcy and things you can do to build your credit .. Thanks Minority Mindset ..

[@handyman3320]

Can I hire you for my buiness taxes Jaspree?

[@phanib1237]

Thank you 🙏🏻 I will have to be serious about my retirement

[@jamesd493]

I am employed by a major bank in the U.S. and they offer both Traditional and Roth 401k. It's almost 20 years and I'm so happy I chose Roth. Great video! Ty

[@Henry-sj1kl]

Thank you 😪.

[@theGrayArea2]

My advice to younger folks when it comes to investing is, just start.

[@philtheboi358]

Im a minor, I cant invest yet but im saving so I will have some to invest

[@theGrayArea2]

@@philtheboi358 your parents could start a Roth IRA for you still and they’d be on account as well

[@philtheboi358]

@@theGrayArea2 im 17 1/2, I just dont see the point in making an account where my father could drain it at any second if he wanted to, and have to jump through hoops in 6 months to get him off it. And I want to invest in mutual funds and index funds, not an IRA

[@theGrayArea2]

@@philtheboi358 understood

[@BadWeatherfreak]

@@philtheboi358 wait then

[@johnlichtenthal8759]

Another thing to consider, which I’ve rarely heard mentioned: tax deductions and credits. I have 5 kids under age 18 right now. That’s 5 large tax breaks I have right now, that I won’t have when I retire. So you better believe I’m doing Roth 401k contributions right now. My taxes are depressed right now because of those deductions and credits, which lessens the tax burden on my Roth contributions.

[@heslind]

Agreed. Once I had kids I changed my contributions to Roth.

[@ziaulislam87]

What deductions? Kids only give u 2000 tax credit that's nothing? Am I missing something

[@westdeaton4127]

@@ziaulislam87 Well fill lucky, Because i was only getting about 800 a kid in early 2000s with 8% home interest rate and 4.00 a gallon gas 🙄

[@wayward03]

​@ziaulislam87 That's a fair amount for middle and upper middle class people

[@granitemoss1451]

My husband uses a Roth 401k at work, and get a certain match. ANY time we contact the brokerage firm about ANYTHING, there is high pressure to switch to a traditional 401k, and to move out of our chosen funds into a target age fund. Nope, those aren't for us, we're happy with what we've got! Great info as always.

[@Dgon200]

Why do they pressure you into switching into traditional... and a targeted age fund??

[@granitemoss1451]

@@Dgon200 A targeted age fund would make more $$ for the firm in the form of fees, but I'm not sure why he's so convinced traditional is the way to go.

[@MetalBum]

K H-C why would they pressure you to change to a traditional if it’s already a Roth 401k

[@DevasKnight]

Always remember if you change jobs or retire you can roll over that account. At least then you can find a more competent advisor to manage it or just do it yourself.

[@jessykapop]

Jaspreet . Just want you to know you are my favorite investment/ wealth planning badass KZbin channel. Every single video is amazing. You explain everything perfectly and make the topics interesting and easy to follow. Thank you!!!!

[@MinorityMindset]

:)

[@ctothej870]

Same here! Thank you, Jaspreet! 👍👍

[@SwastiMusic]

Totally Agree. I learn so much from Jaspreet. Thanks a ton.

[@ChrisInvests]

Roth is much better because there are no required distributions. If you live beyond the life expectancy, your traditional 401k or Ira will run dry 👎

[@Je.rone_]

Roth 401k also require minimum distributions at 70 1/2, But don't take my word for it.💪😉

[@blood_sausage9620]

@@Je.rone_ I don't understand, could you explain? I'm in both but I'm trying to figure which one is gonna be the main one, thank you

[@Je.rone_]

@@blood_sausage9620 when you turn 70 1/2 you have to start taking money out each year from your 401k account, whether you have traditional 401k or a roth-401k doesn't matter. The amount required to take out is *not* a set numerical value for every person (e.g $2,000 a year). I'd be lying if i said i remember off the top of my head how your required amount you need to take out once you reach said age is calculated(i used to know it off the top of my head) Roth-IRA on the other hand, you are not required to take money out at any age. Often people (including myself in the past) confuse this peculiarity of the roth-ira as being a characteristic of all roth accounts which isn't the case unfortunately. That said if i missed any or further clarification let me know💪

[@blood_sausage9620]

@@Je.rone_ thanks brother!! I need to learn this language haha. Living to that age alone is a great accomplishment these days🙏

[@Je.rone_]

@@blood_sausage9620 my pleasure, and yes I always hope I'm lucky enough to make it there but I'm dubious of that. And the language can be the hardest part of learning something knew. The concepts of a new subject of acquisition typically is 100% easier after learning the language.

[@k9willy424]

I watched 3 videos on youtube trying to explain this to me. I finally got the difference when I watched you! TY

[@gerdaharms6485]

Same! Jaspreet does a great job!!

[@ricardomacias9035]

"ROTH" "Thank you very much" Respectfully many blessings n Well being to you n your family.

[@bren70403]

I contribute to both a traditional and Roth 401 through my employer. Also contribute to a Roth IRA outside of my employer

[@villapinstriping]

Good plan. I'm gonna try to do that and make my traditional Roth a divided account

[@sha_la007]

Good Morning Jaspreet! I think having both are good especially if you have an employer that matches. Never leave money on the table is a valuable lesson that I have been taught. I think I could do better with my Roth. I need to max it out. I am almost there, but I need to get there. Almost is not good enough!

[@RATM1971]

Having both is only good because the employer match is tax-deferred, otherwise Roth all the way. Besides the fact that growth is tax-free, a Roth IRA has no RMDs. People who have really saved for retirement in a traditional can get kicked up into high tax brackets with RMDs even if they don't need the money. That screws up your medicare premiums and everything else.

[@janettemartel9643]

@@RATM1971 agree. There's RMDs if peeps leave their money in a company 401k/457b plan Roth after they retire...if you get your money out of employer plan and rollover outside you must liquidate assets to rollover 401k Roth funds to an individual Roth...also must already have an established individual Roth account opened so can rollover into and best if done as early as possible because have to hold funds in Roth IRA for 5 years before able to withdraw. funds. Bit of strategic planning needed but then can rollover and reinvest!

[@Mannymd]

Why isn't this channel called Sikh-ing Wealth?!?!

[@shashwatpandey8766]

Damn bro 😂

[@echo4491]

Genius!

[@thicccorgi6187]

👐😂👐

[@cheerios4canaries]

This

[@Benweiser]

Cousin Bunti approved

[@joannapalacios6337]

I have both also Roth 401k and 401k from Amazon. Seriously I've been googling trying to find out the difference a few months ago and by chance today I just came up on your video on KZbin and by chance I say because wasn't looking for anything on the subject lol. I want to say thank you because I finally got my answer you made easy enough for me.

[@joannapalacios6337]

@Bd from the 213 well I actually have both of them still. At my age I don't know if I should just leave it like that

[@thomasreedy4751]

If you go with a Roth 401k, open a Roth IRA so it will be mature when you need to roll your money over.

[@layzlifts9856]

@Minority Mindset I started watching this because I wondered if I could use part of my 401k for stock investments. When I saw the option, I started clicking through and it prompted me to convert my traditional 401k to a Roth 401k. Now I know the difference, I would actually prefer a Roth 401k but am unsure if my employer with continue to match my 4%. I guess I have to call l HR on Monday and get some questions answered. Oh, and you have a new sub here. Great work.

[@SlickGamble]

Another angle to consider: You gotta know your bracket and for moderate income earners, there's very high value in the pre-tax savings since you are stretching the amount you earn at the 12% bracket. You can get up close to 70k earned income before you run out of easy runway. How? Maximum contribution to the 401k, HSA pretax investing and the 12k standard deduction. After that, you'll need taxable investment money to take advantage of other possible options such as charitable donations, tax loss harvesting, etc.

[@xiction]

I started with the Roth and went to traditional when I had higher income but I switched back to the Roth because tax rates are lower.

[@joelcorley3478]

Smart woman!

[@reyreyes5182]

What happens to the traditional 401k investment when you switch to a roth? Does the money get taxed and then transfers or does it all transfer in not taxed? Or does it not transfer at all?

[@xiction]

@@reyreyes5182 doesn't transfer just stays there

[@travis1240]

Good plan.

[@workingguy-OU812]

Question: I haven't heard it mentioned in videos like this one, nor read it in the comments - Is a Roth 401k an option the employer gives folks instead of a traditional 401k, or is the method to find an independent investment firm that offers a 401k, then just put one's money in it after paying the taxes from the employer's paycheck?

[@zulkifalahmad2347]

I am watching Jaspreet's video on valentine's day with his pink turban.

[@beckytanner4020]

Traditional IRA is really for people who start investing late and/or don’t expect much growth in the IRA. If you’re young and invest long term, go with Roth.

[@emiliobarretto9732]

I always tell people, It's never too late to start investing. The best time to invest was always yesterday and the second best is always today.

[@noelstout3056]

Absolutely Emilio, particularly if the goal is to retire early and rich.

[@DavidMiller-du9dy]

Not every is able to identify lucrative positions to earn from, Investing is a marathon. My best piece of investing advice is to talk with an investing professional. Get someone on your team who’s well enlighten on the global market and it’s conditions at all times.

[@beckytanner4020]

Absolutely David, this is exactly why I opted for an account manager years ago. Adam Slater guides my investment decisions, he makes research on stocks that will generate massive gains, and does the heavy lifting for me, covering every facet of investing including stocks and crypto. His investing decisions has earned me profits in hundreds of thousands.

[@kumarvenkatesh6600]

Investing is worth the hard work. If you don’t save and invest now, you won’t have anything to live on in retirement.

[@TheLuckyWarrior]

Sadly, mine was a pre-tax deduction so when I pulled out money, I had to pay tax on the entire amount. 😢 Rolled it over into an IRA before taking a distribution. I pulled out a large sum to purchase a rental property. Now I have to pay tax on the money I pulled out this year to pay the tax for what I took out last year. Live and learn. I should have bought the property inside of a self directed IRA.

[@thinkingaboutit9826]

Good comment

[@TheFirstRealChewy]

Yeah, those taxes do get you when you need to pull more than planned.

[@PassiveIncomeTom]

Very good explanation. 👍 These are great if someone doesn't have time to spend watching the markets every day.

[@young9534]

Doing traditional now. Gonna switch to Roth soon as I pay off my debt.

[@timm7098]

@@EdgerDelgado Usually no if you stay with the same fund family

[@happytrader-s3n]

@@timm7098 Yes, you pay the taxes on the traditional If you decide to roll that account balance into a roth.

[@timm7098]

Yes taxes if you convert from a IRA but no taxes on a regular investment account to a Roth assuming the taxes were paid. I thought the question was about fees though.

[@smartinvestor2796]

I have Roth 401K, employer match and 17 years more to go!

[@iowawizkid1]

Da Plan 1. 5 rental properties owned, 1 currently. Move headache to property mgmt when i retire. 2. 10% traditional ira 3. Max out Roth for wife and I 4. I'm in Iowa, so farmland in a location that will be in high demand 20-30 yrs down the road. 5. Create a trust for assets to pass along benefits to future generations.

[@duneme]

We have a lot of old 401K standard $ but, now we are putting away all we can with ROTH! I think we are going to be lucky to have enough! We bought some Rental Houses a few years ago so, we are hopeful that will help!

[@TheFirstRealChewy]

That will surely help unless the rentals are nit performing.

[@duneme]

@@TheFirstRealChewy They are doing better than I ever imagined they would do! One thing I’m lucky in> Not: Cards, Games, Sports, etc. but, I’m happy with this option!

[@rb7454]

Contribute to a traditional/401k during your highest earning years (for lowering to tax bracket, but contribute to Roth when you have lower income (like when you are in school, on maternity, etc). Also then convert everything to a Self-Directed IRA

[@RATM1971]

That used to be my thought, until I started calculating RMDs and medicare costs. There is a reason many retirees convert all of their traditional IRAs/401ks to Roth and pay the taxes involved out of pocket upon retiring. If you have the option to do the Roth, do it sooner rather than later.

[@danielestrada9816]

My company offers both traditional 401K with a match, and a Roth 401K. I do both 👍

[@TheFirstRealChewy]

Until a few years ago I was contributing to a 401K for several reasons, the main one being I didn't know about investing so never really touched the accounts until then. Sure wasted those valuable years spending every dollar on crap and contributing almost nothing to retirement (wasn't even receiving the full match).😮‍💨 I'm a different person today. I'm now contributing 100% to a Roth 401K. I'll switch back to contributing to a 401K closer to retirement.

[@LegitLegacyx]

Best explanation hands down!👏

[@super1988guy]

I know I subscribed to you for a reason when you only had 1500 subscribers. Your videos had changed my life!

[@jlee-dw3zu]

I just retired, but I am uncertain that my 401k and IRA will ensure a stable future. I have $900k set aside, I am seeking an approach that matches my risk tolerance and financial objectives. Please I need advice, should I invest in stocks or real estate ?

[@WilliamsJones-jx1ce]

You should explore rosters of dividend aristocrats and select six to ten from the compilation. These esteemed companies boast of a remarkable history of consistently paying dividends for over 25 years. Furthermore, it is discerning to engage a financial advisor to help in crafting a meticulously structured portfolio.

[@EthanRaynolds]

I quite agree. Which is why I prefer to entrust my day to day investment decision to a financial advisor. With their specialized knowledge, it is highly unlikely for them to underperform. Their expertise is focused on harnessing the asymmetrical potential of risk while employing measures to safeguard against unfavorable outcomes. I have been collaboting with a financial coach for the past two years netting over $800k profit in all my portfolio holdings.

[@HarperScott-pk6uk]

I need advice on how to rebuild my portfolio and develop more successful tactice. Please who is the advisor you're using?

[@EthanRaynolds]

The adviser I am working with is Jason Herman Pierce, he is a risk manager, financial advisor and a professional trader. You can choose to use someone else, but his strategy works for me hence my results. You can google him to get all the necessary information.

[@HarperScott-pk6uk]

​@@EthanRaynolds Thanks. I just googled him. He is quite the subject matter expert. I have book an appointment with him. Thanks again.

[@mikeviking1000]

I invest up to the 4% match in a Roth 403(b) and the remaining retirement contributions go into a Roth IRA. I invest more in my HSA though. I love that thing.

[@NoDebtButLove]

Great explantion amd sweet disclaimer.😂"I am not your attorney"😂

[@bcarpiothetek]

I always like when he says "I am an attorney, but I am NOT YOUR attorney" lol.

[@Roguish_nerd]

Hey Jaspreet, I dont have anything to add to this, but wanna let you know you inspired me to start monetizing my side hustle!

[@AB-tu3mz]

Just opened two traditional IRA and two Roth IRAs for my wife and I. I was pleasantly surprised to see that I could still contribute for last year since the tax filing date ended July15. I immidiately maxed out all our IRAs for a total of $24K unvested. Plan to max out the 2021 contribution as soon as January comes around. I hope I'm not making a big mistake.

[@alrocky]

$24k for both years and both of you is a good plan however half t-IRA and half Roth IRA is less than ideal. Do you have access to 401(k)s and are you in a relatively high or low tax bracket?

[@AB-tu3mz]

@@alrocky I'm in a lower tax bracket than I will be when I retire. I also expect to be in a much higher tax bracket in six years. I have a 401K type account currently in addition to the IRA i just opened.

[@alrocky]

@@AB-tu3mz Since you are in a relatively low tax bracket now and expect to be in a much higher tax bracket in six years you should both have Roth IRAs now for the next five years. If your income and budget allows you should contribute as much as you can into your 401(k) [$19,500[ and her 401(k) [$19,500]. You could go Roth 401(k) but it's I'd lean toward maxing the 401(k). If you could contribute $19,500 Roth 401(k) that would be great. You want to favor traditional 401(k) when at your highest tax bracket.

[@AB-tu3mz]

@@alrocky I'm no sure who you are or what you do, but that's great advice. I've been doing about 50% Roth 401K and 50% traditional 401K. Except for this year. I sold a house so I expect to be a higher tax bracket this year. For that reason, I am maxing out my 401K and opened traditional IRAs to put some more money in there. Thanks.

[@RATM1971]

You put after tax investments in your traditional IRA? That defeats the point. I hope you converted them immediately?

[@dragonsrage7215]

Thank you for putting in work on your videos. I am watching and liking your vids.

[@r4ym1n13]

I converted to the Roth 401k. Dividend stocks all the way

[@markrocka8718]

I was hoping you’d break down the difference in compound interest gains vs tax losses between tradition and Roth investments.

[@KA-NV]

I love your videos. They are so informative and easy to understand. Thanks so much for doing them.

[@sotocarlos7809]

Skih always such badass and smart people! never met one who doesnt provide such great life advice.

[@Telegraph_Singh_invest817]

Chat me up ☝️☝️

[@mikeurichuk7104]

It's interesting to compare American Tax-Advantaged accounts with Canadian ones. It seems like Roth accounts are like our TFSA and traditional accounts are like our RRSP. Always love listening to your videos!

[@michellecasais3738]

Thank you for making this video. It was very easy to understand and the visuals really helped.

[@FiscalForward]

Traditional 403b. Is a way to think of this as just income in retirement. if you make or if you withdraw 100K a year that is what you pay taxes on. It is a question of lifestyle in retirement and having enough to live off earnings without touching the actual contributions portion once you stop working.

[@RATM1971]

It's not only that though... say I only need $40k a year in retirement, but I've done great saving in my 403b and have a sizeable amount. I could hit 72 and be forced (via RMD) to withdraw $140k when I only need $40k. What will that do to my taxes? To my medicare premiums?

[@bumbleBEE212.]

i dont usually comment. your videos are awesome and it is crazy and a sign. I just stopped my pre-tax contributions after it hit me that I rather put in my taxed money. yes my take home will be less but I will adjust.

[@michael49022]

MM you mentioned that while we are not taxed on the amount that our Roth 401k earns, we are taxed on the amount our employers contributed over time. My question is how does the IRS keep track of that amount over the years so they can tax us correctly and how do we know that the IRS is taxing us correctly? I've had several different employers 401k Roths and some employers have changed the amount they match from year to year. Great video. It made me consider things that I dont think I've considered before.

[@alrocky]

Your 401(k) account should show two balances, one for your Roth 401(k) balance and the other your traditional 401(k) balance. The latter is taxable upon distribution.

[@kobe51]

It still sounds like a guess as to what will happen in the future , either way...

[@Troyboy23]

I love the concept of this channel. The Hustle-mindset of today extends beyond identity. And this channel is taking a leadership role. Bravo 👏

[@Telegraph_Singh_invest817]

Chat me up ☝️☝️

[@MinkaLovesPineapples]

Thank you SO much for your informative videos! They are easy for me to understand 🙂

[@trinab.9633]

When leaving your employer, transfer the Roth 401k over to a Roth IRA, all withdraws tax free at retirement age, the better investment.

[@thicccorgi6187]

Yes!!

[@thomasreedy4751]

Ideally yes, unless you have financial issues as 401ks often are protected from garnishment and iras may not be.

[@Andrew-it7fb]

I'm not planning on rolling my 401k into my Ira. I'm planning on retiring before 59 and you have the option of making withdrawals from a 401k at 55 if you retire then.

[@thomasreedy4751]

@@Andrew-it7fb I hope that your 401k administrator lets you withdraw your funds in increments at 55. Many require a lump sum withdrawal, which will hit you with high taxes.

[@valeriesmith6237]

I’m investing 30 percent of my income in a Roth 401k. I have it all in an index fund SnP 500. I get a 2 percent match

[@Je.rone_]

*Common mistake is thinking Roth 401k doesn't require minimum distributions at age 70 1/2. The Roth-ira doesn't require minimum distributions.* 💪

[@kingkongz84]

My man. I see you everywhere 😂😂. I guess we watch the same stuff🤣

[@Je.rone_]

@@kingkongz84 most likely, i don't own a t.v so KZbin is where I be at💪

[@snakeonia7542]

Roth 401k is easily rolled into a roth ira though..

[@Je.rone_]

@@snakeonia7542 Nothing but truth has been spoken by you jake 💪😀

[@kingkongz84]

@@Je.rone_ same bro. A TV is a loss. KZbin is a free investment in yourself.

[@BazzBusiness]

Man you are awesome you inspired me to create this channel i have only 22 subs now but i hope one day i'll succeed like you, thank you!!

[@jakevb141]

I use a roth 401k because I know my income will be much higher in 40 years

[@calveryc1]

It’s not about what your income will be in 40 years. It’s about how much you are going to draw in retirement. You could be investing much more now and take advantage of compounding interest. I’m able to invest 20% more due to it being pre tax so the real question is: will 40 years of higher contributions outpace a possibly higher tax rate?

[@ahndeux]

@@calveryc1 Don't forget, if you're a savy investor, you will have dividend income and that factors into your overall income. You may argue that the dividend income is treated differently in terms of the tax rate, but that may change in the future with a more "liberal" president and congress. I don't have a crystal ball so having two buckets of money in a pretax and aftertax gives me flexibility in the future. If the tax rates are good, I would leave the aftertax money in the account so it can compound faster. If the tax rate is high, I can split a portion from the pre-tax and a portion from the aftertax. Options are always good when you have retired.

[@RATM1971]

@@calveryc1 Yeah, but it's also not only that. In a traditional the growth is taxed, in a Roth the growth is not taxed. But even more importantly, the government requires you do RMDs at age 72. Do a great job saving in a Traditional while young and you could have RMDs far greater than what you need, pushing you into a higher tax rate. And that forced income will also make your medicare premiums much higher. Also, a traditional passed to heirs will have forced RMDs for the heirs, they are forced to liquidate in 10 years, which could really screw up their tax situation too. A lot more to consider than just your future tax rate. There is a legit reason many retirees are paying big money to do Roth conversions from their traditionals.

[@calveryc1]

@@RATM1971 I believe Roth’s will require RMDs as well after death.

[@RATM1971]

@@calveryc1 A Roth IRA does not. The Roth 401k does, but you can easily and taxfree, roll a Roth 401k into a Roth IRA so you won't have any.

[@GrowthMindsetProductions]

I *really* enjoy the quality and variety of educational videos on this channel. All I can say is *keep* *it* *coming* ! :)

[@Inspiring_smartkid]

Good video,easy to understand

[@jamie49868]

The important thing is to get into at least one or the other. As statistics show, people have a very difficult time saving money. A 401k requires very little effort...the money is invested without you lifting a finger, and you can't get to it very easily, meaning it will stay in your account, plus there is generally a match involved. A Roth requires you to write a check or set up direct payments, allows you access to the money, making it very tempting and easy to pull it out, defeating and eroding your retirement goals. We know how life gets in the way of our plans, many people intend to invest but somehow they never get around to it....a 401k is funded before you get your check. Taxes can change on the Roth also. The gov. is licking it's chops to tax the earnings, and don't think they wont pass a law to get to it. All the "free" stuff that is so casually tossed about, is not free to those who have to fund it. So you need to do something. The thing is you can do both. The more you save, the better off you will be. I have never complained about making money.

[@RATM1971]

Many employers offer a Roth 401k, so it's as little effort as a traditional 401k.

[@lukedornon960]

I did traditional 401k when I was younger and single. Now that I have kids and TCJA is in effect I put it all in Roth. If rates go back up and/or when the kids age out of dependency I will switch back...

[@TheJoshheart90]

I’m doing both and my company matches 10%

[@1BestCookie]

You are really knowledgeable love your personality and hustle

[@jerrybolton2240]

Currently in a roth pretty satisfied with it

[@jongoldenstein5449]

Need to add the effects of marginal vs effective tax as well as the effects of AGI based credits and deductions to your analysis.

[@KRscience]

I like a combination of a Traditional 401K and a Roth IRA. That way I can pull money out of both during retirement, but the Roth money will keep me out of a higher tax bracket.

[@ProjectAnubisUSA]

They wouldn’t classify it as how much income a individual person makes like when your employed and pay taxes at the end of the year or not since the Roth was already taxed and it’s your money outright? Does potential compound growth outweigh the retirement taxes you could get with the traditional 401(k)? I suppose it depends on how much you project your portfolio to be when retirement comes around...

[@RATM1971]

What about RMDs?

[@robertblake60]

@@RATM1971 Have you looked into what the actual RMD rate would be when you hit 72 and beyond?

[@RATM1971]

@@robertblake60 Extensively, have you? It can become an unmanageable tax and medicare premium situation depending on how your investments do.

[@johngill2853]

@@RATM1971 you do realize for most people RMDs are not a big problem. And if they will be a problem you obviously should adjust for this. RMDs should be considered in the equation but for many they will not be a problem

[@omkarsran7433]

Great knowledge brother love ur videos

[@djangomarine6658]

Roth 401K all the way! Also make sure you're invested in the lowest fee index fund that your employer offers. 🍻

[@djangomarine6658]

@JNS TRUCKING INC. Setting it up as an employee? Contact the HR department. Employees usually qualify after a few months or a year. Setting one up as an employer? No idea. My business isn't big enough for that yet so I haven't looked into it.

[@djangomarine6658]

@JNS TRUCKING INC. It is. It's like getting an instant 50% profit on your investments.

[@phabeondominguez5971]

@@djangomarine6658 I thought when doing a work 401k there was no fees? How do we invest in the lowest fee index fund, or better yet, how do we find out what those fees are?

[@djangomarine6658]

@@phabeondominguez5971 There definitely are fees. I'd contract my HR department and find out who the brokerage is. If you're enrolled, you should get documents that show what the fees are for each fund that they offer. Then pick the lowest cost broad market index etf.

[@Cicero82]

Agreed

[@alohastateofmind3565]

Back when the BELOW was so soft and cuddly.

[@ashakuldip1657]

Thanks for the explanation!

[@donward2466]

Keep up the good work

[@GamerBody]

Roth IRA for me. Also I do contract work now but even when I had a standard 9-5 I had a Roth as my employers didn't have a 401K yet being a startup.

[@losinglouie]

Gold!!

[@s0nnyyy]

great video bro. representin

[@AverageJoeInvestor]

Informative video!The ROTH 401K is a super awesome opportunity for those people who cannot otherwise contribute to a ROTH IRA because they earn to much money according to IRS rules. These people are ALLOWED to contribute to the ROTH 401K nearly $20,000 every year and then their distributions are TAX FREE! Awesome opportunity that EVERYBODY should be taking advantage of. Great video! 😎

[@leslietiwari8625]

I love your videos. You are totally right in your advice.thank you, Jaspreet 🤩

[@jonmaclennan]

And the answer is real estate! 🏠

[@joyaustin6581]

Is your opinion still the same?

[@juandavid018]

Roth IRA + Traditional 401k. I will use up my tax free money (roth) first, before taking out of the 401k money (401k). I will also try to delay pulling out from the 401k as long as I can until the mandatory minimum kicks in.

[@noooddle]

You really might want to talk to someone about this idea. I don't know your situation, but in general, that's a very weird strategy.

[@alrocky]

@@noooddle You are correct. *Juan* *Jaramillo* seems to have placed the cart before the horse. Also curious is that more than one person agreed with him.

[@InOrlando]

It totally depends on your income. I already lost access to my Roth IRA because of income limits. Super wack!

[@alrocky]

@@InOrlando *backdoor* Roth IRA allows you to contribute to Roth IRA.

[@RATM1971]

Why in the world would you do this? Have you run an RMD calculator?

[@dugfriendly]

Reg 401k. 6% match + 5% in lieu of a pension. Total 17% into my plan.

[@rb7454]

What employer are you with that gives 6 %match + 5%? I’d love to come work for your employer

[@ivanabutler6213]

Thank you so much! You explained this clearly!

[@Telegraph_Singh_invest817]

Chat me up ☝️☝️

[@handyman3320]

I like your head wrap

[@Whattanu]

I cashed out the little I had on my 401k bought rental property and due to having more deductions paid very little to the fuzz. Also the property is worth a lot more now then the stocks ever would have been worth with limited choices in a company 401k.

[@Telegraph_Singh_invest817]

Chat me up ☝️☝️

[@jeffcombs6455]

I have a Roth IRA already that I've funded the last couple years.. I will be starting a new career and will choose a Roth 401k with 3% company match because my income will be low to start.

[@jeremy8715]

I have both with TSP but no employer match. Any suggestions?

[@alrocky]

Are you legacy military or CSRS government employee?

[@thomasmoore2458]

Depends on age and individual tax situation, younger and/or lower earners should go for roth (because of longer growth time for compound interest), higher earners should go for 401k. Also, if you think you will have very little income in retirement (think 65 and older) (ie social security could be gone, or pension goes away) go for 401k in a middle income earning bracket (currently 22/24% and up). Also, if tax brackets change, it's also time to reevaluate your plan. There are so many factors, and you did a great job addressing the benefits and drawbacks of each option.

[@sody2000]

great information my friend!

[@adamlawler5952]

Many people will have lower expenses, and lower income, once retired. Lower income will equal a lower tax bracket, making a traditional 401K A better option.

[@charlesbickel4295]

Tax rates will be higher. You should have income in retirement. If you don’t you shouldn’t retire.

[@adamlawler5952]

@@charlesbickel4295 you don’t need as much income in retirement as you needed when you were raising a family, building your retirement, saving for college education for kids, and so forth. For most people, retirement income is less than what they earned during their peak earning years. This fact should put most people in a lower tax bracket during retirement then they were in during their peak income years, this making a traditional 401(k) plan more attractive.

[@YoloSwegs]

I have higher expectations for myself, Roth is the way to go

[@RATM1971]

You might take a look at the many RMD calculators out there and plug in your numbers for traditional. Also look at the Medicare premium calculators. Sure would suck to be in a high tax situation when you don't need the money that year.

[@AnthonyChilisGMMP]

Keep in mind even he said he can’t tell what the taxes will be when it’s for you to pull. 401k is the way to go

[@kgbj44]

Yes!!! Thanks for the explanation!!!

[@dioneiakunz4836]

You are awesome!! Thank you for this info.🙏

[@mthomas503]

I set up a Roth 401k that invests my money in an index fund to keep expenses low. Now I'd like to know what to do, in the future, to reduce the taxes on the match from my job.

[@r4ym1n13]

You cant its pre tax

[@mthomas503]

@@r4ym1n13 Doesn't mean that taxes can't be reduced. I never said reduced to nothing.

[@mthomas503]

@@r4ym1n13 I just figured it out. The employer match can be rolled over into a traditional IRA then I would be able to do a tax-free direct transfer into my HSA.

[@mthomas503]

Then use that money for medical expenses as I get older and it'll be tax free.

[@r4ym1n13]

@@mthomas503 give me a link to this source please

[@samalmas4588]

so i think you missed out on something here. The contribution from the match is taxed in an Roth IRA once you withdraw but the gains on the match are not taxed.

[@alrocky]

"contribution from the match is taxed in an Roth IRA once you withdraw" --- That doesn't seem to make sense.

[@RATM1971]

That's not correct. Your contributions are after-tax and the growth is tax-free. Your employer's match is tax-deferred as is the growth on that portion of the contribution.

[@Mitzi104]

What is my employer doesn't match? How much should I contribute percentage wise? 401k and roth?

[@bookswithbenjamin8902]

Can you do more videos on options for Self Employed people and small business owners?

[@justducky8508]

I like this intro, keep this intro in all your videos. I think it’s very cool to have, but stick w the smash like button sound & the emphasized link “below”

[@mmaranta785]

Traditional 401k lowers your AGI, so you pay less taxes while you are working

[@travis1240]

And more when you're retired ....

[@johngill2853]

@@travis1240 do you know what to standard deduction is? At minimum I want enough for my traditional to take advantage of the standard deduction

[@mathewg1747]

Sounds like it depends on the current tax rate. If you are taxed high at the moment then traditional is best. If next year you are taxed low, then Roth is best at that time. Reassess your situation when milestones appear which affect your tax rate.

[@baphnedia]

I am investing in stocks and invested in a military career, which I am able to collect a modest retirement from while I work and go to college.

[@richie50]

You deserve more subs. I see people with more subs who aren’t as good as you.

[@mrcrowleyoz]

So how is the 6% calculated in a roth 401k from every paycheck? From the gross or net pay?

[@TopFloorPM]

But how do you open roth IRA, where do I go? Bank or online? No video tells u

[@johngill2853]

Vanguard or Fidelity Google is your friend, simply Google it

[@O_l_i_v_e_r391]

Thank you for this video, you are the first person I've seen to explain the difference. you have one of the best financial channels out there. .

[@luiv6075]

You make a lot of sense with the low tax rates right now to go Roth

[@seanl2863]

Is there a annual limit contribution into the Roth 401K like the Roth IRA or no limit?

[@alrocky]

$19,500

[@clartro]

Those examples of high tax rates are extremely misleading. Nobody paid even half those rates throughout history, the actual rates people paid were much lower.