Where should I put my retirement savings: 401(k), regular IRA, Roth IRA, something else?

In the Video above, Scott Farnsworth, Central Florida's Tax-Free Retirement Expert answers a frequently asked question:  Where should I put my retirement savings: 401(k), regular IRA, or something else?

"Well the answer to that question depends on whether you want to pay a lot of taxes in retirement, or you don't. If you want to pay a lot of taxes, then the great vehicle is the 401k, or the regular IRA. You get a deduction for those contributions when you put them in, they grow tax free, but when you take it out the whole thing is subject to tax that's your highest marginal rate. On the other hand, the Roth IRA, and my favorite, the TRA, or the "Tax free retirement account," you don't get a deduction for the money you put in, but they do grow tax free. Best of all when you take them out, all the distributions are tax free. Now if tax rates are at their lowest historical rates today, which they are, and you look at the deficits that we're running as a country, you can expect that tax rates will be much higher when you retire.

 For me the smart decision is to find a tax free retirement vehicle, like a Roth IRA, or the TRA."


To see more videos by Scott Farnsworth, see our Frequently Asked Questions Videos page, Tax-Free News page, or our YouTube channel.