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If you have a Roth 401(k) plan, youll contribute money youve already paid taxes on.
When you withdraw your funds in retirement, you wont need to pay taxes.
The opposite is valid for a traditional 401(k) plan.
Here, money is taken from your paycheck and added to the 401(k) plan before taxation.
You then must pay taxes on your withdrawals in retirement.
Whether you should choose a Roth or traditional 401(k) plan depends on your preference.
Many who think they will have alower tax bracketin retirement opt for a conventional 401(k) plan.
The fee youre paying isnt a one-time fee you pay today, Singh said.
This is free money for the employee, but it doesnt come without strings attached.
Inindividual retirement funds, you’ve got the option to make your own investment decisions.
While these limits discourage some, Singh thinks not having complete control is not a bad thing for everyone.
Your 401(k) plan is a great place to start investing, Singh said.
Its not where you want to stop investing.
This is your beginning-to-invest fund.
Singh suggested understanding all the options to make the best decision for your future.
Putting money into one of Singhs suggested areas can also help you build wealth and fund your retirement.
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