Roth IRA vs 401(k) - Whatโs the Difference and Why Does it Matter?
Whether you’re starting a new job that offers retirement savings options, or you’re looking into managing your investments yourself, it’s easy to get overwhelmed. If you feel like investment lingo is too far beyond your wheelhouse to tackle, learning about the different types of retirement account is a good place to start. In this case, get a basic understanding of the differences between a Roth IRA vs 401(k). Let's work through what each of those types of accounts is, how to use them, and the pros and cons of each. Spoiler alert: Some people are eligible to take advantage of both account types.
What is a 401(k)?
A 401(k) is an employer-sponsored savings plan, which is often included in the benefits package of a full-time job. If your job offers a 401(k), you can sign up through your employer. The account is then managed through the financial institution of your employer’s choosing.
Once you’ve signed up for your 401(k) account, you’ll have...
Leah Hadley, AFC, CDFA
I'm Leah Hadley, a financial planner and money coach. Believe me when I say that I am no stranger to financial challenges. Becoming a mom to 3 children overnight, job loss, divorce...I've experienced a lot of financial challenges in my adult life and it has fueled my passion to help others reach their financial goals. I am here to support you every step of the way. Thank you for the opportunity to support you on this journey.
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