E. N. discussed on America in the Morning

Automatic TRANSCRIPT

E. N. a four three B. it would be extremely unusual we had a four oh one K. would not be vastly superior right yes it's possible but I've never seen that okay so comparing a four oh one K. to a Roth IRA so you can't take the money from your four one K. I heard it in a Roth four regular IRA unless you've quit your job and you're still breaking in the same school same school district exactly yeah so you can continue to contribute to that four oh one K. and does the district or school system offer any match on your four one K. money no not at all vantage of it then is that it just comes out of your check you don't have to do anything else correct so if you do a Roth IRA it works opposite of that four oh one K. the raw if you don't get any tax break for putting money into the Roth but the money grows tax free and you spend it tax free when you retire where would that four oh one K. he goes in with a tax benefit to you when you put the money on but everything you have in it everything interns you're taxed on at time of retirement right if you're like most teachers are not paying you with a wheelbarrow no they're generally not paying you well right right so you are better served doing the Roth IRA then you are doing the four oh one K. because you don't get enough benefit from the up front tax deduction to make it a good idea to do that we're with the Roth the money you know you put in there you're never going to be taxed on it again okay so how much do you like to contribute in a year how many dollars total not much at all I'm trying to do the math in my head said maybe around fifteen hundred dollars then you're a perfect candidate for doing a Roth okay because you've not come anywhere near the cap on it so I would prefer since there is no match on that for one K. the U. discontinued that and instead you contribute to a Roth and I've got a list of super low cost companies mark dot com on my investment guide the you can look at to set up that Roth IRA okay as long as you have the discipline you put in a hundred a month hundred and fifty a month just set it up automatically so you're always getting that money at okay right thank you for being in there for our kids what grade do you teach I actually work with gifted kids so I kind of went with all great in elementary school K. three five so you're working with brainiacs in elementary school yeah well I was definitely not one of those in any level school here listening to the Clark Howard show.

Coming up next