7 Differences Between Roth IRA and Roth 401(k)

1. Contribution Limit

Traditional 401K or Roth 401K: $19,000 in 2019.

Upon reaching the age of 50, is would be 6,000 more, up to a maximum of $25,000.

Roth IRA: $6,000,

After reaching 50 years old, plus 6,000, with a maximum of $7,000.

2. Distribution

Roth IRA has no RMD requirements and can be taken with no time limit.

Roth 401K has RMD requirements and 70 1/2 must RMD.

If the account holder passed away, only their spouse is not required to be assigned or paid taxes. Anyone other than the spouse listed as the beneficiary must withdraw the minimum amount each year.

3. Matching in Roth 401 (k)

In addition to the no Income limit, Roth 401 (k) has another advantage, with The Roth 401K being able to participate in the employer Matching, but the employer Matching deposits the traditional 401 (k).

4. Investment Control

Roth IRAs allow investors to have more control over their accounts, and investors can choose from the scope of their own accounts, including individual stocks and bonds.

Roth 401(k) can only select its portfolio from a limited investment option in the plan.

5.Income Limit

Roth IRA contribution, with income limits. 2019 MAGI couple sin-share 203,000; Single declaration 137,000.

Roth 401 (k) has no revenue limit.

6. Rules for early withdrawal

Roth 401 (k) and Roth IRA common withdrawal tax exemption guidelines:

A Account must be retained for at least five years.

B Withdrawals at the age of 59 1/2 years of age for disability or death or account holder

Roth 401 (k) can provide loans.

Roth IRA, you can withdraw $10,000 to buy, build or rebuild your first home.

7. Protection Level

Roth 401 Enjoys ERISA Full Coverage

Roth IRAs do not enjoy ERISA coverage, which is usually set by the state government, but is covered by federal bankruptcy protection, with a limit of 1 million. But rollover from Roth 401k is guaranteed.