Hey everyone - I saw Jeremy post about this a while back on IG about it not mattering how much is in a specific account when it comes to growth of the investments. Is this true?!
Example: my 401k with 100k in it vs. my Roth IRA with 10k in it. Isn’t it always better to put it into the 401k for better growth with the larger amount of money?
The explanation was solid but I’m having a hard time wrapping my mind around it! Haha thanks!
Hi @mbaskin2005!
Thank you for the question. I couldn’t find the post Jeremy made, but I think I remember the one you are talking about! I would agree that it doesn’t matter which account the money goes into.
Using your example, let’s say you put $5K into your 401K vs your Roth IRA. And both accounts experienced a return of 10%. Regardless of the account you put the money in, you would earn $500 on the $5K you invested.
The percentage return each account experiences will determine how much your contributions will grow. The size of the account won’t matter.
Does that answer your question? Keep us posted if you have any other questions!
Shane
Makes perfect sense. Thanks!