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Invest in Roth IRA or 401k - first job
Posted on 5/3/16 at 11:48 pm
Posted on 5/3/16 at 11:48 pm
I am beginning my first full time job in a few months and have been reading a lot of threads on this board to gain information in regards to investing.
I know that I should contribute to my 401k at least to the amount that my employer will match. My question is should I also open a Roth IRA and contribute what I can to that or should I just max out what I can afford to contribute to my 401k?
Any opinions are much appreciate
I know that I should contribute to my 401k at least to the amount that my employer will match. My question is should I also open a Roth IRA and contribute what I can to that or should I just max out what I can afford to contribute to my 401k?
Any opinions are much appreciate
5
Posted on 5/3/16 at 11:53 pm to wrc12
401k up to match. Then max out Roth IRA.
You're (hopefully) making the least amount of money you ever will. That's when a Roth has the biggest benefit.
You're (hopefully) making the least amount of money you ever will. That's when a Roth has the biggest benefit.
Posted on 5/4/16 at 7:47 am to wrc12
Only going to reply because I was in your shoes at one point and it helped to hear many people reinforce what I later learned are the correct decision. Like the posters above said, employer 401k up to match then as much as you can to Roth IRA. Reasons: 401k more than likely has higher fees and less investment options. Roth IRA is also considered "more liquid" at the end of the day being able to withdraw principle at any point in time as long you meet a few criteria.
This post was edited on 5/4/16 at 7:48 am
Posted on 5/4/16 at 9:00 am to wrc12
Plus one to all previous statements.
Posted on 5/4/16 at 12:57 pm to wrc12
Check with your employer to see if you have the Roth 401(k) option, it is becoming more common in retirement plans. If you do, I would elect contributions to go into a Roth 401(k) and obviously take advantage of your employer match. Max it out if you can afford to.
Posted on 5/4/16 at 1:05 pm to wrc12
Depending on investment options, max out your 401k assuming you have a roth option in your 401k account. It will have the lowest costs most likely.
There are additional expenses with an IRA that probably aren't worthwhile when you are just starting.
There are additional expenses with an IRA that probably aren't worthwhile when you are just starting.
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