Company founder Clayton Alexander was asked by CNBC about how a younger person saving for retirement should choose between a traditional 401(k) and a Roth 401(k). Contributions to traditional 401(k) plans are made with pre-tax dollars, while contributions to Roth 401(k)s are made with after-tax dollars.
“Typically, early-career workers and those in lower tax brackets are advised to opt for the Roth, while those in higher brackets are advised to invest in a traditional 401(k), Clayton Alexander, a registered investment advisor and founder of Teton Wealth Group, told CNBC Make It.
Clayton says savers in the 10% and 12% tax brackets should “usually go with the Roth 401(k), but it’s up to you and your individual financial needs.”
“One of the benefits of starting a Roth at an earlier age is the concept of compounding interest that can occur inside the investment, tax free,” he said.
If you have any questions about your 401(k) or any other financial matter, please don’t hesitate to call Teton Wealth Group in Murray, Utah at 844-838-6600 (844-Teton-00).
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