Hey all, hoping to get clarification on something I've been thinking about recently.
I get that Roth IRAs allow you to pull money out anytime and any interest growth is non-taxed. What's the benefit of putting money into a Roth IRA after following my company match into 401k?
If they're both at an 8% average rate of return, I see it as splitting exponential growth into two separate accounts, thus lowering the total growth. I get that if the Roth plan I invest in hits a "golden goose", I'm set, but I'm not planning for that to happen.
Should I view a Roth IRA as a high rate of return savings account essentially?
In my current situation, I'm contributing 15% to my 401k, with company match up to 7%, and then 10% of my remaining paycheck to a traditional saving account. From what I read here and elsewhere, I should just contribute 7% to the 401k for the match, then the remaining 8% to the Roth. Should I even add that 10% I'm depositing into a traditional savings account to the Roth since I can pull it out anytime?
Apologies if these are basic questions, it's the first time I've had a job with any retirement investment opportunity or options and am hoping to get the best bang for my buck.
Edit: As a follow-up. I won't hit the $5500 limit for yearly contributions, but should I opt to contribute to the previous tax year, if I can, versus the current year?
Submitted March 15, 2017 at 10:25AM by Full_of_confusion http://ift.tt/2nag2uQ
