Why Do You Recommend a Roth Over a 401(k)?

Ramsey Everyday Millionaires

Ramsey Network

Careers, Investing, Business

4.6 • 3.6K Ratings

🗓️ 10 December 2025

⏱️ 6 minutes

🔗️ Recording | iTunes | RSS

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Transcript

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0:00.0	This episode is brought to you by SmartVestor.
0:07.9	Connect with an investing pro near you at ramsysolutions.com slash smartvester.
0:13.7	Let's go to Jay in Atlanta, Georgia.
0:17.3	Hi, Jay.
0:18.0	Welcome.
0:19.0	Hey, hello, Miss Jade and Miss Richel. Well, hello, Mr. Jay. How can we help today?
0:25.4	Yes, I just had a question about investing in Roth versus the traditional 401K. And only because, like, from my experience, I've invested in a 401k for about a year and it was about
0:44.8	like $100 in there a couple of months ago but also I had ended up losing my job so I just
0:53.2	went ahead and sold it.
0:55.1	And I got back half.
0:57.3	So I was trying to see what was different.
1:00.0	Okay.
1:00.5	Yeah.
1:01.2	So normally, yes.
1:03.2	Okay.
1:03.5	So what we would normally say is if you leave a job, you want to roll over your 401K just to a traditional IRA.
1:09.7	So you're keeping the investments. You're just moving it out of the company's 401k versus that basically was, yeah, what you did is you just sold it. Yeah. And if the market was kind of low at the time, you know, you may not have gotten, you know, fully what it was and probably paid some taxes and all of it. Fees. Yeah. Because it was retirement funds. Yes. Yeah. So, yeah, you did get hit hard with some penalties. So our rule of thumb with investing is, did your 401K at your previous employer? Did it have a match built in? Yes. It had about a 4% match. 4% match. Okay, perfect. Do you have a new job now with a 401k currently?
1:47.1	Yes.
1:47.8	I have a new job, and they actually match up to 30%.
1:53.5	Wow.
1:54.4	That's great.
1:55.0	That's great.
	...

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