Clark Howard explains how if you save a dollar in a Roth IRA you save $1 but it's not the case if you do the same in a 401(k)

Clark Howard advocates for Roth IRAs and 401(k)s over traditional options, emphasizing their benefits for long-term retirement savings. He argues that contributions to Roth accounts provide a dollar-for-dollar return during retirement, unlike traditional 401(k)s, where taxes will apply later. He warns that current tax rates are low and could increase, making Roth accounts a strategic choice to secure future tax advantages. As Social Security may only replace a fraction of pre-retirement income, finding effective retirement savings methods is essential for many individuals.

"I'm obsessed with the Roth as a way to save for retirement." Howard emphasizes that saving through a Roth guarantees you get the full benefit of your contributions, unlike traditional 401(k)s where taxes apply later.

Howard warns that today's tax rates are historically low and believes future rates are likely to be higher, making Roths more advantageous as they lock in current tax rates.

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