Roth Ira vs 401k

[The Real Messi]

is this true??

"For example, say you had only $1,000 to invest and are in the 25% tax bracket right now. Your one time investment of $1,000 will go straight into your 401k and then grow to a little over $4,600 in twenty years (8% growth per year). Then, you withdraw it to spend it during retirement and owe taxes on that $3,600 of profit and the original $1,000 investment as well. But, now you are in the 38% tax bracket twenty years into the future. So, you get to keep only $2,880 of your hard earned money after taxes. If you had invested that $1,000 twenty years ago in a Roth IRA, you would have had only $750 to invest after 25% was taken out right away for taxes. That one time investment of $750 would grow into $3,500 in those twenty years and can then be withdrawn completely tax free.

Now think of that $1,000 on a larger scale. If you maxed out a Roth IRA (currently $5,000 per year in 2009 if you are under the age of 50) from the time you were 22 until 65, you would have approximately $1.9 million nest egg tax free."

[StateOfTrance]

What you said basically sounds correct. Roth is post tax and regular is pre tax dollars. It's basically a toss up, you have to basically guess what tax bracket you will be in when you retire as compared to now. Roth sounded appealing to me untill I learned you cannot combine the two, in other words if you have a regular 401K and you want to start a Roth 401, you cannot just transfer over your money. You have to start a second seperate account.

[StateOfTrance]

I totally just realized that you said Roth IRA. Nevermind then, haha work is frying my brain. I need a beerrrrrr so I can fry it my way at least.