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Message: <blockquote data-quote="3Roosters" data-source="post: 292863" data-attributes="member: 1351">401k or IRA's for dummies..i know there is a book out there..haha Traditional 401k (pretax)..lets say you make $60,000 year and contribute $3000 into your traditional 401k, thus your TAXABLE amount is only $57,000..saving you tax deducts... and then when you withdraw from this account...assuming post 59 1/2 yrs old..it will be taxed at the rate you are at, at that age..not only your deduction amount but also any growth in the account...perhaps not a big deal if you are retired and don't have any other income.Roth:  Its After tax...ie..that same $60,000 wage earner will see $60,000 on their taxable income versus $57,000 in the traditional scenario..big difference is since you have already paid tax on your Roth contributions..withdrawals are tax free..as is the growth.Couple other items:Traditional 401ks and IRA's have  Required Minimum Distributions once you reach 70 and 1/2 ys old(whether you want to take money or not). ROTH accounts do not have that requirement.Personally, I have both Traditional and RoTh.. if I need more money each year when I retire and don't want it to be taxed, I will take out of ROTH. I think it makes sense to have both..just my opinionThere are only a couple tax free vehicles to pass on to your beneficiaries. ROTH 401, IRAs and Life Insurance...both of which are subject to the good ole Gov changing when they need the money. My guess is if you have EXISTING ROTHs and Life that it will be grandfathered but new(when new laws are passed) will be taxable..but..we all know our legislators can an do how they wish.  Term limits!</blockquote>

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