This is a guest post from Andrea Horn, a personal finance instructor, mom of two boys, and creator of Recession Proof Living.
Want to get out of debt and start building wealth? Then grab some …
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401K, Roth 401K’s, IRA’s, early retirement, retirement planning
Why would anyone choose a Traditional 401K over a Roth 401K?? After all, your company paid match is equivalent and if it’s post tax with a Roth, you’re really getting more money from your employer.
WRONG!
Your employer’s match on Traditional 401K’s AND Roth 401K’s is pre-taxed and always automatically put into a separate Traditional 401K account. Your match will be worth the same amount today and in the future, whether you contribute to the Traditional or the Roth. If you thought you were being clever by going with the Roth to get more of a match, well…. sorry.
To the Readers:
Did you think that by contributing to a Roth 401K you were getting a bigger match?
If you found this article helpful, subscribe to my free RSS feed, or sign up for free email updates! You may also find the following articles of interest:
The Complete Guide to Choosing Between a Traditional 401K and a Roth 401K
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