With traditional 401(k)s, by contrast, account holders get to deduct their contributions from their income, but taxes are due when those funds are withdrawn, usually during retirement and at a lower tax rate because the saver is no longer working. Beshears: What we found is that people didn’t save any differently, in the sense that they still had the same total contribution rate. But it makes a big difference if you’re doing it in the traditional 401(k) or the Roth. If the 401(k) is a traditional one, taxes are due on the balance. Let’s say the person’s tax rate is 20% in retirement. Beshears: Indeed, it’s just a difference of whether you’re paying your taxes now or later. With the Roth 401(k), you’re paying the taxes now. WSJ: Do you recommend the Roth 401(k) over the traditional pretax option? If people have a rule of thumb for the number of dollars they put into these savings vehicles, the exact same implications follow. Traditional 401(k): Study Finds a Clear Winner” first appeared in The Wall Street Journal.
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After spending decades hard at work in your career, it’s now time for you to relax and enjoy your retirement. But as you leave the workforce, you may need to save as much money as possible in order to get by on a fixed income. One of the tools that seniors and retirees can use to save money is a credit card that offers good rewards.
Cash-back credit cards tend to offer the best rewards for most people, especially if you don’t travel a lot. The idea is pretty simple: For every dollar you spend on the card, you get a certain percentage back in statement credits or cash. It’s hard to argue about the value of real money.
Still, in our list of the best credit cards for seniors, we’ve also included a premium travel rewards credit card. For retirees intent on hitting the road, it offers valuable benefits and services that make traveling more comfortable and convenient.
Here are the best credit cards for seniors and retirees.
Blue Cash Preferred® Card from American Express
For those who spend a lot on groceries, there’s no better card than the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, 1% after that), 3% at U.S. gas stations and select U.S. department stores, and 1% on other purchases. As a bonus, you can earn $150 back in the form of statement credit after spending $1,000 in purchases in your first three months. Apply by 5/3/17 to earn 10% cash back on purchases at U.S. restaurants in the first 6 months, up to $200 back. Terms apply. There is a $95 annual fee for this card. See rates and fees.