Roth 401K vs opening a Vanguard account

Nov 12, 2019 7 Comments

I’m curious what the benefit is in investing in your roth 401K account through your employer when you could open a vanguard account and have more flexibility in how you invest your post tax income?

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TOP 7 Comments
  • Google / Eng UWEE27
    With a similar return rate you will have more money if you invest pre-tax.
    Nov 12, 2019 2
    • PayPal / Other jrjrbehejq
      OP
      I was more interested in the benefits of Roth 401K vs just opening up a brokerage account and investing the money yourself. Don’t get why ppl open up a Roth 401K account
      Nov 12, 2019
    • eBay immune
      The gains in the investment through Roth 401k will also be tax free, that's not the case on gains from investments through standard brokage account. "Contributions and earnings can be withdrawn tax-free as long as certain criteria are met."
      Nov 13, 2019
  • PayPal owo owo
    You don't pay capital gains for a roth
    Nov 13, 2019 0
  • PayPal owo owo
    Tax benefits
    Nov 13, 2019 0
  • PayPal / Other jrjrbehejq
    OP
    Thanks all!
    Nov 13, 2019 0
  • Splunk 38rhggl
    You max 401ks and IRAs first because both have tax benefits. 401k you dont pay taxes on the money going in, roth on the way out.

    They are literally just normal investment accounts wrapped in special tax code that saves you a ton of money.

    With that info the answer should be clear why you wouldn't choose a normal investment account first, at least for retirement.

    If you want to go balls deep in a single company the you'd need a normal account. At that point your accounts arent used for retirement planning though.
    Nov 13, 2019 0

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