--- title: Why Retirement Savings in Roth IRAs Tend to Outlast Traditional 401(k)s description: Retirement savings in a deferred-tax retirements account like a 401(k) might not last as long as savings in a Roth IRA, a new study shows. authors: - name: Brenden Rearick role: Reporter url: https://money.com/author/brenden-rearick/ bio: Brenden Rearick is a former reporter at Money who specialized in covering breaking news and enterprise stories about credit cards, real estate, investing, and personal finance trends. education: University of Pittsburgh, BA at_money_since: 2023 articles: 133 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes - Technology former_staff: true editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2024-03-14T15:28:09.000Z' modified: '2025-02-12T18:39:30.000Z' section: Retirement tags: - News word_count: 451 canonical: https://money.com/retirement-savings-roth-ira-outlast-401k/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of an elderly couple sitting on a quarter together.](https://img.money.com/2024/03/News-Retirees-Exhuast-Savings.jpg) Having enough money to last through retirement is a goal for most people, but what's the best strategy for saving? As it turns out, the type of retirement account you select can influence how far your money will take you. A new [report from the American Accounting Association](https://publications.aaahq.org/jata/article/doi/10.2308/JATA-2022-020/12356/How-Does-Tax-Timing-Affect-Spending-in-Retirement) explores whether it's better to pay taxes on retirement accounts when the money is invested or later, at the time of withdrawal. Specifically, it compares how retirees' savings lasts for people who have tax-deferred accounts like 401(k)s versus those with currently-taxed accounts such as Roth IRAs. The findings may come as a surprise. ## Increase your income today with a Reverse Mortgage ### If you're 62 or older, work with a licensed Finance of America (NMLS# 2285) representative in your state today. [Learn More](https://money.com/pr/f9aaa98cdbb4?ap_referrer=%2Fretirement-savings-roth-ira-outlast-401k%2F) ## Roth IRA vs. 401(k) Overall, the research indicates that paying taxes on retirement accounts upfront will help retirees stretch their money longer than those who pay later. Currently-taxed accounts like [Roth IRAs](https://money.com/what-is-a-roth-ira/) tend to outlast tax-deferred accounts like 401(k)s with similar balances, the report finds. The researchers monitored about 350 participants who managed either a deferred-tax account or a currently-taxed account with equal balances. The money in a deferred-tax account — like a 401(k) or traditional IRA — is not taxed until it is withdrawn. The money in a currently-taxed account — like a [Roth IRA](https://money.com/how-to-open-a-roth-ira/) or Roth 401(k) — is taxed when it is invested, rather than when withdrawn. What the researchers found is that participants spent money at similar rates regardless of their type of account. As a result, those using deferred-tax accounts tended to exhaust their savings more quickly than those using currently-taxed accounts. These findings help to illustrate a key difference between two different types of retirement accounts, and show how the choice in account you make could influence how long your money lasts. One way to think of this is by considering a deferred-tax account as one with "fees" — the taxes paid on withdrawal. The problem is that deferred-tax account holders may not factor in how much they'll wind up paying in these fees, so they're prone to running out of money more quickly. "Our findings suggest people with deferred accounts may need to save more than they think, unless they're confident in their ability to account for taxes when making spending decisions in retirement," said Marcus Doxey, an associate professor of accounting at the University of Alabama and co-author of the report. The gist is that it appears safer and easier to manage your retirement money if it's in a currently-taxed account. Paying those taxes upfront may be painful, but it's better than running out of money too soon. ![](https://s3.consumersadvocate.org/prd/image/image/39553/medium_d01d803f-1110-4310-8997-bada342c27e4.webp) Get the most out of your Reverse Mortgage with Finance of America (NMLS# 2285) [Learn More](https://money.com/pr/ed1a928f8683?ap_referrer=%2Fretirement-savings-roth-ira-outlast-401k%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/retirement-savings-roth-ira-outlast-401k/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "401(k)", "item": "https://money.com/401k/" }, { "@type": "ListItem", "position": 4, "name": "Why Retirement Savings in Roth IRAs Tend to Outlast Traditional 401(k)s" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/retirement-savings-roth-ira-outlast-401k/#webpage", "url": "https://money.com/retirement-savings-roth-ira-outlast-401k/", "name": "Why Retirement Savings in Roth IRAs Tend to Outlast Traditional 401(k)s", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-03-14T15:28:09.000Z", "mainEntity": { "@id": "https://money.com/retirement-savings-roth-ira-outlast-401k/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/retirement-savings-roth-ira-outlast-401k/#breadcrumb" }, "dateModified": "2025-02-12T18:39:30.000Z" }, { "@type": "NewsArticle", "headline": "Why Retirement Savings in Roth IRAs Tend to Outlast Traditional 401(k)s", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/03/News-Retirees-Exhuast-Savings.jpg", "width": 2880, "height": 1920, "caption": "News-Retirees-Exhaust-Savings" } ], "author": [ { "@type": "Person", "name": "Brenden Rearick", "url": "https://money.com/author/brenden-rearick/", "@id": "https://money.com/author/brenden-rearick/#author", "description": "Brenden Rearick is a former reporter at Money who specialized in covering breaking news and enterprise stories about credit cards, real estate, investing, and personal finance trends.\r\n\r\n", "email": "brenden.rearick@money.com", "alumniOf": "University of Pittsburgh, BA" } ], "publisher": "https://money.com/#organization", "datePublished": "2024-03-14T15:28:09.000Z", "description": "Retirement savings in a deferred-tax retirements account like a 401(k) might not last as long as savings in a Roth IRA, a new study shows.", "abstract": "Retirement savings in a deferred-tax retirements account like a 401(k) might not last as long as savings in a Roth IRA, a new study shows.", "@id": "https://money.com/retirement-savings-roth-ira-outlast-401k/", "inLanguage": "en-US", "dateModified": "2025-02-12T18:39:30.000Z", "editor": [ { "@type": "Person", "name": "Brad Tuttle", "url": "https://money.com/author/brad-tuttle/", "@id": "https://money.com/author/brad-tuttle/#author", "description": "Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.\r\n\r\n", "image": "https://img.money.com/2014/01/Brad-Tuttle.png?w=226&h=247&crop=1", "alumniOf": "Columbia University School of Journalism, MS", "sameAs": [ "https://twitter.com/bradrtuttle", "https://linkedin.com/in/brad-tuttle-834b225" ] } ], "wordCount": 451, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Retirement", "sameAs": [ "https://en.wikipedia.org/wiki/Retirement" ] }, { "@type": "Thing", "name": "401(k)", "sameAs": [ "https://en.wikipedia.org/wiki/401(k)" ] }, { "@type": "Thing", "name": "Individual retirement account", "sameAs": [ "https://en.wikipedia.org/wiki/Individual_retirement_account" ] } ] } ] } ```