Roth IRA vs. 401(k) – Which Is Right For You?

IRA vs 401K

We know how hard deciding between a Roth IRA vs 401k can be when trying to decipher it for yourself. That is why we here at Hacker Accounting created a quick list to showcase the two option’s main differences, so you can be as informed as possible of the possibilities available to you!

Control over investments

Roth IRA – Total control

401 (k) – Varied and limited control

Funding

Roth IRA – Uses post-tax dollars

401 (k) – Uses pre-tax dollars

Payments

Roth IRA – Pay as much / as little as you want

401 (k) – Set amount withdrawn from paychecks automatically

Investment Control

Roth IRA – Total control

401 (k) – Varied and limited control

Deposit Minimums

Roth IRA – No minimums

401 (k) – Required minimums

Tax Breaks

Roth IRA – Lowers taxes after owner retires

401 (k) – Lowers taxable income

With all of this information, deciding which factors are more important to you will help you choose between the two saving options. If you would like to speak to a certified accountant for further clarification and benefits, give Hacker Accounting a call at (602) 375-5251 today!

Chris Hacker
Chris has been working in the bookkeeping and accounting field for over 15 years preparing business, income and payroll taxes. Chris has a bachelor’s degree from Arizona State and is an Enrolled Agent with the Internal Revenue Service.