7) Roth IRA should precede 6) Max out 401(k) as one's retirement plan may be fraught with high fees and horrible investment choices. Maxing out ($7,000) Roth IRA has several advantages over ($23k) 401(k) and with flexibility to replace or double as 2) Emergency Fund.
I see your points. I suppose it depends on the situation (and their 401k fund menu as you stated). From a tax perspective, maxing out a Traditional 401(k) would allow tax deductions that a Roth IRA doesn't.
@@SparkWealthAdvisors From tax perspective Roth IRA may be preferred before maxing traditional 401(k) especially if employee is in relatively low tax bracket. Actually contributing to traditional 401(k) results in tax *_reduction_* not tax deduction.
7) Roth IRA should precede 6) Max out 401(k) as one's retirement plan may be fraught with high fees and horrible investment choices. Maxing out ($7,000) Roth IRA has several advantages over ($23k) 401(k) and with flexibility to replace or double as 2) Emergency Fund.
I see your points. I suppose it depends on the situation (and their 401k fund menu as you stated). From a tax perspective, maxing out a Traditional 401(k) would allow tax deductions that a Roth IRA doesn't.
@@SparkWealthAdvisors From tax perspective Roth IRA may be preferred before maxing traditional 401(k) especially if employee is in relatively low tax bracket. Actually contributing to traditional 401(k) results in tax *_reduction_* not tax deduction.