2. To be able to compare and
contrast the options of saving
for retirement: Traditional IRA,
Roth IRA, & 401k

3. “When it comes to the future,
there are three kinds of people:
those who let it happen, those
who make it happen, and those
who wonder what happened.”
- John M. Richardson
“

4. “The best thing about the future
is that it comes one day at a
time.”
- Abraham Lincoln

5. Traditional IRA
Roth IRA
401k plan
 IRA
 Individual Retirement
Arrangement
 There are benefits to each
type…

6. Tax Benefits
 Your money accumulates
interest that is tax free!
 You can put in up to $5,000 per
year
• After age 50, it increases to
$6,000
You can put money into it
until April 15th of the next
year.

7.  Funded with pre-tax money
 You pay taxes on the money when you
withdraw the money after retirement
 Interest is tax free
 No income limits
 Can begin to withdraw funds when you
are 59½ years old with no penalty
 When you are 70½, you must take
yearly w/d

8.  Funded with after-tax money
 You pay no taxes when you withdraw
 Income limit: less than $101,000
 No penalty for early w/d of principle
money
 You may not w/d the interest until
retirement w/o penalty
 No age requirement for withdrawals
 No age requirements for contributions

9. Roth IRA
 You are young
 Make < $50,000
 Your tax rate will be higher when
you retire.
Traditional IRA
 If your tax rate will be lower when
you retire
 If you are closer to retirement

10.  Employer-sponsored retirement plan
 FREE MONEY!!!!!!!
 Employer matches contribution
 Money is contributed to 401k plan pre-
tax
 Pay taxes when you make w/d after 59½
 Cannot w/d before 59½ w/o penalty

11. http://www.bloomberg.com/personal-
finance/calculators/401k/
401k Calculator

12.  You can take a loan from your 401k
plan to pay certain expenses
 Not a good idea!! You will be taxed
twice!
 You can participate in 401k & IRA at
the same time

13. 1. Explain the difference between
the Traditional & Roth IRA.
2. What method would you
suggest to Brittany?