Apr 25, 2017
7:54:57am
7:54:57am
I would advise contributing to your 401k up to where your employer matches, and
then the rest to a Roth IRA.
Right now it doesn't make sense to maximize your pre-tax contributions to retirement because you are young and probably not paying that much in taxes anyway. But employer match is free money, so at least take advantage of that, and then put the rest into a Roth, which gives you tax savings on the back end instead of now.
Later in life when your kids are gone and you are earning more money is when it makes sense to maximize your pre-tax contributions in a 401k or traditional IRA.
Right now it doesn't make sense to maximize your pre-tax contributions to retirement because you are young and probably not paying that much in taxes anyway. But employer match is free money, so at least take advantage of that, and then put the rest into a Roth, which gives you tax savings on the back end instead of now.
Later in life when your kids are gone and you are earning more money is when it makes sense to maximize your pre-tax contributions in a 401k or traditional IRA.
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