The best way to save for retirement may include this underused plan investinyou (In partnership with acorns.)
In this way, Roth 401 plans are similar to, except there's no income limit on who can participate in a Roth 401 — and the maximum annual contribution for workers under age 50 is more than three times higher.
In addition to the $19,000 a year you can save in a Roth 401, there's also a catch-up contribution of $6,000 if you are over age 50. With a Roth IRA, you can contribute $6,000, with an additional $1,000 if you're 50 or older. On the flip side, the IRS requires you to start taking withdrawals out of your Roth 401 at age 70½. ACurrently, only about 11% of employees contribute to a Roth 401, up just 3% in the past five years, even though roughly 7 out of 10 companies"Making sure you're contributing to employer-sponsored plans is important, whether Roth or not," said Meghan Murphy, a vice president at Fidelity.
Of course, it doesn't have to be one or the other. Many advisors recommend taking advantage of both types of retirement savings plans, if possible.
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