How do I know if a Roth IRA or a regular 401K is a better long term investment?

Both IRAs have advantages and I know that tax rates are not predictable. I am age 54 and I need to know which one is better over the next 10 years to take me into retirement.

The consensus on Diehards.org seems to be .

1. Contribute to your 401K up to the Company Match (The Free Money)

2. Fund A ROTH IRA

3. Fund your 401K to the Max.

4. Taxable investment if you have any $$$$ left...lol

If no Company Match go directly to ROTH IRA
It is before taxes so all the money you get is tax free.

Good Luck Gerry

I believe stocks that pay dividends are a better investment if you're young and you have quite a way to retirment.
But at age 54, most investors will tell you to go with either one, depending on the max contribution your employer makes to the 401.

Unbelievable question? Does the company you work for match your contribution? If yes then most probably the 401k is better. If not probably the Roth is better. If you are looking to save more than $4500 a year, why not do the Roth and then top it off with some in the K. (If you are married your spouse can also do a Roth). If you are looking to max out the K first because there is a match and add even more on top of that, then also do the Roth. Please read my profile if you will need help with the Roth

401K is the best first choice because one generally gets the company match. AKA free money.

After contributing enough to your 401K for the company match, a ROTH is your best bet due to its tax exempt status since it is funded with after tax dollars.

At the age of 54, the tax exemption won't be as large of an advantage since you are likely in a much higher tax bracket than you were when you were younger (ROTHs are ideal for younger individuals in lower tax brackets than they will be in during retirement) but it is still your best bet.

Good luck!

If you have a 401(k) available, I'd do that first. On top of that, if your income doesn't exceed the maximum allowable, you can fund a Roth IRA. If you don't have a 401(k) availble, look at the conventional (deductible) IRA and then invest whatever else you can into "tax-efficient" mutual funds or muni funds.

At your age I'd avoid the ROTH. Tax rates are not that unpredictable and you likely are not going to be changing your tax bracket over the next 10-12 years. So it would likely be a complete wash tax-wise for you. Better for you to take the tax deduction now....bird in the hand so to speak.

The benefits of the ROTH are really for the young and those whose tax bracket figures to go up during retirement through either increased pay, inheiritance, or large retirement plan buildups. 2 out of 3 of those are leaning towards the younger people. At 54 you're pretty well aware if any of those options are going to effect you. If they aren't...you will pay pretty much in taxes with either option...so do you want to pay your taxes now? or later?

For me...I'd rather pay them later. And if I die, then my beneficiaries pay the taxes....what do I care? I'm dead!