Social(k) Smarts: Roth option in 401(k). Higher contributions for any income.

Brief outline of Roth IRA compared to Roth option in 401(k). The big difference is a higher contribution limit into the Roth 401(k) account compared to a Roth IRA. Up to $16,500, over age 50 - $22,000, and no earnings limit like in the Roth IRA. (High wage earners have not been able to make Roth IRA contributions.) After tax contribution of $16,500, or up to $22,000 if over age 50, grow tax differed with earnings distributed tax free. Build this account, we will talk about flexibility in distribution or as an estate planning tool in a later clip.

Category:

Education

Tags:

• Social(k)
• Social(k) Smarts
• 401(k)
• IRA
• Roth IRA
• Roth option 401(k)
• solo(k)
• tax free distribution
• after tax contribution
• Tips for retirement plans