Roth IRA or 457(b): Which is better for your retirement savings? An expert weighs in

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EDITOR’S NOTE: This story was originally featured in the Savings Challenge newsletter, which you can sign up for here . The weekly newsletter offers readers savings tips, expert answers to your questions and weekly challenges to help boost savings. If you’d like to have your savings question answered by our experts, please send it to savingschallenge@cnn.com.

Sometimes, the problem with savings is less about where to get the money than which savings vehicle to put them in, since they each have their own advantages and disadvantages.

In this week’s Ask the Expert for CNN’s Savings Challenge, Douglas Boneparth, certified financial planner and founder of Bone Fide Wealth, breaks down the differences between a Roth IRA and a 457(b), which is offered to employees of some state and local governments and tax-exempt organizations.

A reader from Florida asks: “I am skeptical of the future conditions of the economy and the status of Social Security. Where should I focus first for investing and saving for retirement? Roth or 457(b)? I often hear: do both, balance them out; but I am specifically asking which to maximize first. And if you have an explanation as to why, that would be very helpful.”

DOUG: I love this question because you’re not asking whether to save for retirement. You already know you should. You’re asking how to do it smarter. That’s a much better conversation to be having.

The 457(b) is an underrated account, especially for public employees. Unlike a 401(k), there’s no 10% early withdrawal penalty, meaning you can tap it before age 59½ without penalty. If early retirement is part of the plan, that matters a lot. Contributions also reduce your taxable income today, which is valuable if you’re in a higher bracket now.

CNN Photo Illustration/Photograph by Sylvie Rosokoff

However, the Roth is powered by something the 457(b) can’t match: tax-free growth and tax-free withdrawals in retirement. You pay taxes now and you never pay taxes on that money again. And here’s where your Social Security concern gets interesting. Roth withdrawals don’t count toward the income thresholds that determine how much of your benefit gets taxed. If benefits shrink or get taxed more aggressively down the road (which is a legitimate concern) having a tax-free income source gives you flexibility a pre-tax account simply can’t.

If your 457(b) has an employer match, grab it first. But if you’re forced to prioritize one, go with the Roth. Tax-free income in retirement is one of the most powerful tools available to today’s savers. And given your skepticism about Social Security, you might sleep better at night knowing you had that tax-free bucket to draw from.

Have your own savings question for Doug? Please send it to savingschallenge@cnn.com.

Consistently saving and investing even small amounts of money can grow into an impressive nest egg over time.

For example, if you consistently save $200 a month ($2,400 a year) from ages 25 to 65 in a pre-tax account like a 401(k), 403(b) or deductible IRA, you could have a $512,000 nest egg by age 65, according to the Plan Sponsor Council of America. That assumes an average annual return of 7%.

If you can only salt away $100 a month ($1,200 a year pre-tax), but your employer offers a dollar-for-dollar match on that amount, you still can end up with half a million dollars after 40 years.

And if you’re able to save $200 after-tax in a Roth IRA, you will have half a million dollars tax-free when you retire.

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编者按：本文最初刊登于“储蓄挑战”电子报，您可在此处订阅。这份每周电子报为读者提供储蓄技巧、专家解答疑问以及每周挑战，帮助您提高储蓄效率。如果您想让我们的专家解答您的储蓄问题，请发送邮件至 savingschallenge@cnn.com。

有时，储蓄的问题不在于从哪里获得资金，而在于将资金存入哪种储蓄工具，因为每种工具都有其自身的优缺点。

在本周 CNN 储蓄挑战的“专家问答”环节中，注册理财规划师、Bone Fide Wealth 创始人道格拉斯·博内帕斯 (Douglas Boneparth) 详细讲解了罗斯个人退休账户 (Roth IRA) 和 457(b) 计划之间的区别。457(b) 计划面向一些州和地方政府以及免税组织的雇员开放。

一位来自佛罗里达州的读者问道：“我对未来的经济形势和社会保障现状持怀疑态度。在投资和退休储蓄方面，我应该首先关注哪个？罗斯个人退休账户（Roth IRA）还是457(b)计划？我经常听到这样的说法：两者都做，保持平衡；但我特别想知道应该优先最大化哪个。如果您能解释一下原因，那就太好了。”

道格：我喜欢这个问题，因为你不是在问是否应该为退休储蓄。你已经知道应该储蓄。你是在问如何更明智地储蓄。这才是更有意义的讨论。

457(b)账户是一个被低估的账户，尤其对于公务员而言。与401(k)账户不同，457(b)账户没有10%的提前取款罚款，这意味着您可以在59岁半之前提取资金而无需支付任何费用。如果您的计划包含提前退休，这一点就显得尤为重要。此外，缴款还能降低您当前的应税收入，如果您目前处于较高的税率档位，这一点就显得尤为重要。

CNN图片插图/摄影：Sylvie Rosokoff

然而，罗斯IRA账户的优势在于457(b)账户无法比拟的：免税增长和退休后免税提取。你现在缴纳税款，退休后就无需再为这笔钱缴税。而这正是你对社保的担忧所在。罗斯IRA账户的提款不计入决定社保福利缴税额度的收入门槛。如果未来社保福利缩水或税率提高（这确实是一个值得关注的问题），拥有免税收入来源能为你提供税前账户无法比拟的灵活性。

如果你的457(b)计划有雇主匹配缴款，那就优先选择它。但如果必须二选一，那就选择罗斯个人退休账户（Roth IRA）。退休后的免税收入是当今储户最有效的工具之一。考虑到你对社保的疑虑，知道自己有这笔免税资金可以随时支取，或许能让你晚上睡得更安稳。

您也有关于储蓄的问题想问道格吗？请发送邮件至 savingschallenge@cnn.com。

坚持储蓄和投资，即使是小额资金，假以时日也能积累成一笔可观的财富。

例如，根据美国养老金计划发起人委员会的数据，如果您从25岁到65岁每月坚持在税前账户（例如401(k)、403(b)或可抵扣IRA账户）中储蓄200美元（每年2400美元），到65岁时您就能积累51.2万美元的养老金。这假设年均收益率为7%。

如果你每月只能存下 100 美元（税前每年 1200 美元），但你的雇主提供与你存入金额等额的匹配资金，那么 40 年后你仍然可以积攒 50 万美元。

如果你能在罗斯个人退休账户（Roth IRA）中税后储蓄 200 美元，那么退休时你将拥有 50 万美元的免税资产。