In many cases, a Roth IRA may be a better option than a 401 (k) retirement plan, as it offers more investment options and greater tax benefits. It can be especially useful if you think you'll find yourself in a higher tax bracket later on. Even if your company offers a Roth option in its 401 (k) plan, you may still prefer the Roth IRA because it offers greater flexibility and customization. The main difference between 401 (k) and IRAs is that employers offer 401 (k) plans, but people open them (using brokers or banks).
The ability to contribute to a Roth IRA is gradually eliminated as income increases; not everyone may be eligible to contribute to a Roth IRA. A Roth IRA is a good option if you don't qualify to deduct traditional IRA contributions or if you don't mind giving up the immediate IRA tax deduction in exchange for increasing your investments without taxes and tax-free withdrawals when you retire. As you can see, Brian has the lowest balance after 30 years, since he chose the traditional IRA and spent all the tax refund he received as a result of using the traditional IRA.