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Why should you consider a Roth IRA in your retirement plan?

Blog Post
2 min read
piggy bank with sticky notes reading 401(K), roth, and IRA

When it comes to saving for retirement, it's hard to beat a workplace 401(k). Especially if your employer offers matching contributions. But if you don't have access to a 401(k)...what then? That’s where an IRA (Individual Retirement Account) comes in.

Think of an IRA as your personal retirement savings plan. One that gives you more flexibility, more control, and in some cases, tax benefits.

So, what exactly is a Roth IRA?

A Roth IRA is one of the most popular types of IRAs. With a Roth, you contribute money that you’ve already paid taxes on (after-tax dollars). That might not sound exciting, but here’s the magic: once your money is in the account, it grows tax-free. When it's time to take it out in retirement, you don’t pay taxes on it.

That means all those years of growth, all that interest, and all those investment gains are yours to keep. For younger investors, or anyone who expects to be in a higher tax bracket later in life, a Roth IRA can be especially powerful.

Why bother with a Roth IRA if you already have a 401(k)?

Great question. Here are a few reasons why it’s worth adding a Roth IRA to your retirement mix:

Flexibility: With a Roth IRA, you can usually choose from a much wider range of investments than you can in a 401(k). That gives you more control over how your money grows.

Tax-free withdrawals: Unlike a traditional 401(k), where you’ll pay taxes when you take the money out, Roth withdrawals in retirement are tax-free (as long as you meet the rules).

No required distributions: 401(k)s require you to start taking money out at a certain age, but a Roth IRA doesn’t. That means you can let your money keep growing as long as you’d like.

It’s a safety net: Contributions (not the earnings) can be taken out without penalty if you ever truly need them—giving you a little extra peace of mind.

Your 401(k) is a great foundation, but adding a Roth IRA can help diversify your retirement strategy and give you flexibility that a workplace plan alone can’t. Even modest contributions today can add up to something big down the road—especially since all that growth is tax-free when you withdraw it.

Saving for retirement doesn’t have to feel complicated. Start where you are, use the tools available to you, and let time (and compound interest) do the heavy lifting. Your SAFE family can help you get your Roth IRA started. We're here to answer any questions you have and walk you through the process when you're ready.