Am I the only one who sees people mixing up their 401k and their Roth IRA?

My cousin in Phoenix called me last month, super proud he put $500 into his 401k for a 'tax free' retirement. I had to gently explain that's the Roth's job, the 401k is pre-tax money. He'd been doing it for a year because his buddy at work gave him the wrong tip. It matters because you could get a nasty tax surprise later. Has anyone else had to untangle this for a friend or family member?

3 comments

3 Comments

joel_jones6d ago

My neighbor in Tampa thought his HSA was just a fancy savings account. He was using it for regular doctor visits and didn't know about the triple tax advantage for investing it.

nancyn696d ago

Tampa's humidity must be getting to his brain.

spencer_coleman6d ago

But is it really a big deal if he uses it for doctor visits? At least he's saving something for health costs.