Connect with us

Hi, what are you looking for?


How to Choose Between a 401(k) and Roth IRA

How to Choose Between a 401(k) and Roth IRA
Photo by Precondo CA on Unsplash

In the U.S., around 63% of people don’t fully understand what a 401(k) is and 66% don’t fully understand what an IRA and Roth IRA is. In my last article, I detailed the differences between these two retirement investment accounts. But how do you know which one to choose?

Which do you choose?

Ideally, it would be beneficial to do both, but there are certain limitations. A 401(k) is heavily reliant on whether your employer offers it. Your investment options, contribution limit and other benefits that come with a 401(k), such as employer matching, also are dependent on what your employer’s plan is. Fortunately, the majority of employers do offer some form of 401(k) plan. A Roth IRA has other limitations such as an income limit. In 2020, an individual making an income of less than $124,000 can make a full contribution. Individuals who have an income of $139,000 and more are not allowed to contribute at all. If you’re in between, then you can contribute partially. For couples that file jointly, the limit is a little higher. This decision isn’t an easy one to make. If you’re still having trouble choosing, here is a list of the pros and cons of a 401(k) and Roth IRA.



  • Employer match
  • Higher contribution limits
  • Maintained by employer


  • Fewer investment options
  • Required minimum distributions
  • Higher fees
  • Withdrawals are taxed

Roth IRA


  • Withdrawals are tax-free in retirement
  • More investment choices
  • No required minimum distributions during your lifetime


  • Lower contribution limits
  • Income limits can prevent you from contributing
  • No employer match
  • Maintained individually

Even if you’re just starting out in your first job, it’s never too early to think about your retirement plan. These two experts in the retirement consulting industry say millennials squandering their retirement savings. Check it out!

14 hours ago
Venmo and Cash App Are Following the Bitcoin Trend -
15 hours ago
Here’s How 5 States Are Impacted by Unemployment Scams -
16 hours ago
Unemployment Fraud Is Ramping Up, and It’s Getting Creative -
17 hours ago
How to Repair Bad Credit: Start by Reading This -
2 days ago
Learn how to bolster your bank account with these tips!

You May Also Like


I am a Robinhood user. I downloaded it to enter the world of investing. Some of my friends from college recommended it because it...

Bold TV

Welcome back to Bold TV! Join our hosts, David Grasso and Julia Sun, and watch live at 12PMEST on Facebook and Twitter. *Update: Watch...


Have you ever heard that Denmark is the happiest nation in the world? In this segment on happiness, we hear from our guest host...


It’s almost been a year since the statewide lockdowns began to spread across the country. Since then, qualified Americans only received one stimulus payment....

Copyright © 2021 Bold TV. Bold TV is owned and operated by GenBiz Inc. a 501(c)(3) non-profit organization.