While a 401(k) and Roth IRA both provide a tax shelter for your client's retirement savings today and a source of income in retirement, there are also key differences in how these two plans work. Helping your clients understand the differences is a great way to once again prove what a trusted advisor you are to your clients. Knowing what these differences are can help them choose the right plan for their specific needs and circumstances.
For example, Roth 401(k) accounts are subject to required minimum distribution rules—meaning account owners must begin taking distributions from the account at age 70 ½. Roth IRA owners, however, are not subject to RMD rules.
Take a look at the attached article "7 Key Differences Between a Roth 401(k) and a Roth IRA" for more details on their options with these retirement accounts. Feel free to provide them a copy of the article.
Of course, I am here if you or your clients have any questions about these retirement plans. One isn't necessarily better than the other, but a further discussion can help you decide which one would work best for their particular situation. Kind Regards, Rudy
Click here to download your copy of "7 Key Differences Between a Roth 401(k) and a Roth IRA"