Is there any benefit to investing in a Roth 401(k) plan, as opposed to a Roth IRA?
I currently have a 401(k) plan at work that has a (very generous) 6% salary match on contributions, with no vesting period on those matches, so I've been paying a lot of attention to investing options lately.
I've decided I want to make my 401(k) contributions into a Roth 401(k) account, which is an option at our company, because I'm currently 21 and the earnings on that account compounded over the next 40 years growing tax-free will be much higher than what I'd save on current taxes on a traditional 401(k).
However, I'm somewhat put-off by the idea that I can't withdraw any money from a 401(k) plan (Aside from loans which must be repaid) without paying taxes and a penalty, before I'm 59 and 1/2 years old.
I recently read that a Roth IRA allows you to withdraw your contributions, but not your earnings, penalty-free at any time, even before that age limit.
I'm starting to think that because of this, the Roth IRA would be preferable for me to invest any remaining earnings that I don't currently need into, as if I do run into a situation in the future where I need to withdraw money from it (purchasing a home, paying for education expenses, something generic like purchasing a car), I won't have to worry about paying additional taxes or fees.
What other benefits do a Roth IRA or Roth 401(k) have compared to each other? I had previously thought they were more or less the same, and am looking for more information about why one might choose one over the other.
I'm currently planning on putting 6% of my salary into the Roth 401(k), to make use of the company 401(k) match, but am thinking I will put anything else I'd like to invest (up to the $5500/year limit) into a separate Roth IRA to invest and have tax-free earnings but also have the ability to withdraw my contributions if something comes up in the future.
Please let me know your thoughts on this, it's a fairly large / broad topic so it's hard for me to get all of the pro's / con's of each option when it comes to retirement and/or investing.