Traditional vs. Roth Contributions

Updated: Nov 30, 2020

Your financial future can be dramatically impacted by simply having one type of retirement account over another. Deciding to have a Roth 401(k) or Traditional 401(k) can either cost or save you money in the long run. An analogy we like to ask is: Would you rather pay taxes on the seeds or pay taxes on the harvest?

Key Points:

  • The difference between a traditional and a Roth 401(k) comes down to when you pay the taxes.

  • While Roth accounts have generally been advised for younger savers, a Roth 401(k) can also give older savers a chance to benefit from tax-free distributions.

  • If your employer offers both, you don't necessarily have to choose one or the other. Consider splitting contributions between the two.

Both have their advantages and it's up to you to decide which type of account best suites your situation.

32 views

1-844-401-5473

5920 S. Rainbow Blvd. 

Suite #4

Las Vegas, NV 89118

  • Grey Facebook Icon
  • Grey Twitter Icon
  • Grey YouTube Icon
  • Grey Instagram Icon

Quest Education is not a licensed broker-dealer, market maker, investment advisor, or underwriter. All information that we provide is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. Furthermore, investing in such securities involves substantial risk of loss and investors should seek advice from financial professionals before investing.

© 2020 by Quest Education.