This is the most important retirement
decision you will make in your 20s!<\/p>\n\n\n\n
WHAT IS A 401K?
\u2192 Retirement account through employer
\u2192 Pre-tax contributions
\u2192 Reduces your taxable income NOW
\u2192 Pay taxes when you withdraw in retirement
\u2192 2026 contribution limit: $23,500<\/p>\n\n\n\n
WHAT IS A ROTH IRA?
\u2192 Individual retirement account
\u2192 After tax contributions
\u2192 NO tax reduction now
\u2192 Tax FREE withdrawals in retirement!
\u2192 2026 contribution limit: $7,000<\/p>\n\n\n\n
THE KEY DIFFERENCE:
401k = Pay taxes LATER
Roth IRA = Pay taxes NOW (better if young!)<\/p>\n\n\n\n
WHY ROTH IRA WINS FOR UNDER 30:<\/p>\n\n\n\n
You are likely in lower tax bracket now
\u2192 Paying taxes now at 22% rate
\u2192 In retirement might be 30%+ rate
\u2192 Roth locks in lower tax rate!<\/p>\n\n\n\n
COMPOUND INTEREST EXAMPLE:
$7,000\/year in Roth IRA from age 22-62
= $84,000 invested
= $3,800,000 at retirement (at 10%)
= ALL TAX FREE! 💰<\/p>\n\n\n\n
WHAT TO DO:<\/p>\n\n\n\n
STEP 1 \u2014 Get full 401k employer match FIRST:
\u2192 This is 50-100% instant return
\u2192 Never leave free money on table!<\/p>\n\n\n\n
STEP 2 \u2014 Max out Roth IRA:
\u2192 $7,000\/year = $583\/month
\u2192 Open at Fidelity or Vanguard (free)
\u2192 Invest in S&P 500 index fund<\/p>\n\n\n\n
STEP 3 \u2014 Go back to 401k:
\u2192 If money left after Roth IRA
\u2192 Contribute more to 401k<\/p>\n\n\n\n
THE PERFECT ORDER:<\/p>\n\n\n\n
Start your Roth IRA TODAY at Fidelity.com
Takes 10 minutes to open! 🏦<\/p>\n","protected":false},"excerpt":{"rendered":"
This is the most important retirementdecision you will make in your 20s! WHAT IS A 401K?\u2192 Retirement account through employer\u2192 Pre-tax contributions\u2192 Reduces your taxable income NOW\u2192 Pay taxes when you withdraw in retirement\u2192 2026 contribution limit: $23,500 WHAT IS A ROTH IRA?\u2192 Individual retirement account\u2192 After tax contributions\u2192 NO tax reduction now\u2192 Tax FREE … <\/p>\n","protected":false},"author":1,"featured_media":152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement","grid-sizer"],"_links":{"self":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=132"}],"version-history":[{"count":1,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/132\/revisions"}],"predecessor-version":[{"id":133,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/132\/revisions\/133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/media\/152"}],"wp:attachment":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}