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Stock-Freedom t1_jadpgxi wrote

Your friend is likely trying to explain a bit much that makes it complicated.

Instead of all these hoops, you should likely contribute pre-tax to a 401k and to a Roth IRA.

Follow the flowchart.

My generic advice:

https://i.imgur.com/lSoUQr2.png

Here is the flowchart from the r/personalfinance subreddit’s Prime Directive. If you follow that, you will be ahead of almost all of your peers.

Stop by the sidebar to see the Common Topics, which include basic money handling and investing.

You don’t need to talk to anyone or buy some random book to do this. You have all the tools right here.

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CSedu OP t1_jadpxqj wrote

Thanks dude! So it seems I should just keep contributing for my match to my Pre-Tax 401k, and then contribute my own money past the match into my Roth IRA?

If so, can I ask why I should use a Pre-Tax 401k and not a Roth 401k? I like the idea of not worrying about the taxes later.

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Stock-Freedom t1_jadq3na wrote

You can ask! The simple reason is you always pay taxes but you likely will pay less in retirement.

Why you should (almost) never contribute to a Roth 401(k) https://reddit.com/r/personalfinance/comments/10qwnrx/why_you_should_almost_never_contribute_to_a_roth/

Note: Depending on your MAGI you may be the almost never.

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CSedu OP t1_jadr3z4 wrote

Sweet, thanks my dude. I will contribute to the Pre-Tax 401k for the match, and then my Roth IRA past that :)

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