Team Members Team 6  James Ayoub  Michael Pan  Melissa Sy  James Traylor

401K vs. Roth IRA  Introduction  Project Outline  Results  Conclusion

401K vs. Roth IRA  401K  Tax-Deductible  Contribution limit is $15,500  Withdrawals are fully Taxable  Roth Ira  Non Tax-Deductible  Contribution limit is $5000  Tax-free Withdrawals

Assumptions Made  Equal contributions to both plans  Roth IRA ineligibility ignored  Flat tax (not tiered)  Annual salary raises kept up with inflation at 3%  ROR is 10%  No 401K matching from employer  No Social Security Benefits  No investment fees  35 working years

Subject  25 year old Engineer  Starting Salary: $50,000  Male  Secret identity: Clark Kent  Allergic to Kryptonite  Favorite Colors: Red & Blue

Results

Conclusion   From our default assumptions our analysis concludes that the 401K is a better plan than the ROTH IRA.

Resources   (great for tax rates)   (Contribution limits to retirement plans)   (general information on plans)

Questions?