IRAs (Individual Retirement Accounts)

Roth IRA and 401(k)

Before the introduction of the Roth IRA, it was a fairly easy and straightforward decision-making process when deciding where to save money for retirement. If you had access to a 401(k) plan, it was always most beneficial to save the maximum pre-tax amount. After-tax contributions to a 401(k) plan were recommended if you had more money to save and did not qualify to make a deductible IRA contribution. These strategies were suggested regardless of whether you received a company matching contribution.

Now, with the Roth IRA and the current IRA deductibility rules, the decision is not so cut-and-dry. As you read through, it is more important than ever before for you to evaluate the other options available to you in saving for retirement and compare them to saving in your company's 401(k) plan.

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