401k roth vs traditional 401k

what's the difference between a 401k roth and a traditional 401k or a roth ira? i actually found a whiteboard but i don't have a whiteboard marker so i'll explain it later. but your employer probably has a 401k that is a different account than a roth ira which you can open up by yourself and you own. well you own all of these accounts but you're the one managing this account where your employer is offering a 401k. the difference between a roth 401k and a traditional 401k is whenever money you're putting in the account in the account you've paid the taxes on. with a roth 401k, you've paid the taxes on it. with a traditional 401k, you're paying the taxes on it. so that means say you make 50k and you get paid weekly, the money that hits your bank account is usually already after you've paid your federal taxes and state taxes. and then after you do that, that money goes into these accounts. that means that when you retire, um or once you have access to these accounts, you have already paid taxes on it. you don't have to worry about paying taxes on it when you're older. some people might be like, well I'd prefer to do that assuming that taxes only go up each year and each decade. however, if you're making more money and you decide that you want to max out your 401k, and you choose a traditional 401k, you actually reduce your taxable income from 100k to 80k. yes, you pay the taxes on this when you retire. some people have a preference towards just paying the taxes now. again, actioning is the most important, but that's the difference between these two. advantage 1. pre-tax means putting more $$ in the market. because you are doing your pre-tax income. so if you make $50,000 a year and you decide that you want to put 10,000 a year into a 401k, you're actually reducing your taxable income from 50,000 to 40,000. you pay the taxes on this when you retire. however, you're also reducing your taxable income from 100,000 to 80,000. if you made 100k and you put 20k into a traditional 401k, you actually reduce your taxable income from 100,000 to 80,000. so for one year when you pull out 40,000, yes, you're going to be getting taxed on that, but you're also getting taxed on that of a 40,000 year tax bracket. so again, actioning is the most important, but that's the difference between these two. advantage 1. pre-tax means putting more $$ in the market. advantage 2. REDUCING YOUR TAXABLE INCOME. if you are in between tax brackets (e.g. a 40k salary pays 12% federal taxes but a 50k salary pays 22% federal taxes), investing in a traditional 401k lowers your tax bracket, you can make more money in your paycheck by investing part of your salary (eg. putting 5k of 50k towards at traditional 401k) because this reduces your tax bracket from 22% to 12%. TAKE ACTION AND START SMALL.