bobbyratliff

Creating structures that automate things people do every day.

Roth vs Traditional chart

In doing retirement planning, I found some charts that compared roth vs traditional for either an IRA or a 401k, but not a lot of charts that compared both types of retirement accounts simultaneously. This is my attempt to create a unified comparison.

Disclaimer: I’m early in my career and am mostly focused on contributions, so the chart doesn’t include a lot of detail on taxes/distributions/earnings. It’s also missing information about IRA “catch-up” contributions.

IRA common features
  • Anybody can make one
  • More control over which funds are selected
  • $6000 annual contribution limit. This is the total of both Traditional & Roth (2022)
 401k common features
  • Controlled by your employer
  • $20,500 (2022 limit)
  • May have company match
Traditional common features
  • May be deductible
  • “pre-tax”
  • Becomes a taxable income source in retirement
 Traditional IRA
  • Deduction limit (example from 2022: filing status is single — no deduction for AGI $78,000 or more)
  • Distributions are taxable (and sometimes required)
 Traditional 401k
Roth common features
  • “post-tax”
 Roth IRA
  • Income-based contribution limit, may not be able to contribute to Roth at all.
  • Contributions vs. earnings have different tax treatment.
Roth 401k

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