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Work 401K or Personal Roth?Posted by GAFF
on 2/11/19 at 6:13 pm



My work matches up to 6% on contributions. I contribute 12%. What are the pro and cons of me only contributing the 6% and putting the other 6% into a personal Roth account?
Pros
-more control of your investments
-Principal in Roth easily assessable in dire emergencies in preretirement ages at no penalty, tax, or forms to justify the expense.
-highly likely these years are the lowest tax rate you’ll be under, so you get an innate mathematical boost to the value of investments
-tax diversification
-more flexibility on withdrawals (Roth’s are not subject to required minimum distributions like 401k)
Cons:
A more dynamic portfolio to manage.
Seriously, it’s common general advice that you get money in 401k up to match, then maximize personal Roth, then maximize 401k
-more control of your investments
-Principal in Roth easily assessable in dire emergencies in preretirement ages at no penalty, tax, or forms to justify the expense.
-highly likely these years are the lowest tax rate you’ll be under, so you get an innate mathematical boost to the value of investments
-tax diversification
-more flexibility on withdrawals (Roth’s are not subject to required minimum distributions like 401k)
Cons:
A more dynamic portfolio to manage.
Seriously, it’s common general advice that you get money in 401k up to match, then maximize personal Roth, then maximize 401k
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