When it comes to retirement savings, two of the more popular vehicles are the 401(k) and the Roth IRA. Both are tax-advantaged retirement accounts, but there are significant differences. Depending upon your specific situation, you may find that one fits your needs better than the other.
What are the savings limits?
For workers who haven’t yet reached age 50, it’s possible to save as much as $19,000 in a 401(k) as of 2019. Those who have passed 50 can save an additional $6,000 as a catch-up contribution. Depending upon their age, those who want to save in a Roth IRA can save $6,000 or $7,000 per year. Both are great savings vehicles, but those who are looking to max out their savings would most benefit from using a 401(k).
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