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When investing in your 401K, which IRA plan would you choose (Roth IRA or Traditional IRA)?...

When investing in your 401K, which IRA plan would you choose (Roth IRA or Traditional IRA)? give an explanation as to how they differ and which you would choose for your retirement.

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Answer #1

I will be going for Roth IRA because I would be mostly be into higher tax brackets and it will be offering huge tax advantages in the long run so I would be trying to cut on to my tax expenditure and help me gain of financial independence also I would be selecting Roth IRA.

1. Roth IRA has tax free growth potential whereas traditional IRA had tax-deferred growth potential.

2.withdrawal from Roth is subject to penalty whereas withdrawal from traditional IRA is not subject to penalty.

3. There is no age limit in selection of Roth IRA whereas there is age limit in selection of traditional IRA

4.there are also limits upon contribution in Roth IRA where there is no contribution limits in traditional IRA.

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