Make Less Than $50,000 Per Year? These Are Your Top 2 Retirement Accounts.

By Kailey Hagen, CFP – Apr 9, 2026 at 3:00PM ESTKey PointsRoth accounts let you make tax-free withdrawals in retirement.Some Roth 401(k)s give you the opportunity to earn an employer match on your contributions.Roth IRAs give you flexibility over what you invest in and how much you pay in fees.When you make less than $50,000 per year, it can sometimes feel like you're living your life on hard mode, especially when it comes to retirement savings. You do your best to use your income wisely, but your monthly expenses leave little room for you to build a nest egg. If boosting your income or lowering expenses aren't options, you have to focus on stretching the savings you have as far as possible. A big part of that is choosing the right retirement accounts, and two in particular really stand out. Image source: Getty Images. 1. The Roth 401(k) A Roth 401(k) is similar to a traditional 401(k), except that you pay taxes on your contributions in the year that you make them. This can slightly increase your tax liability, but it doesn't always result in a bill. You may just get a slightly smaller refund than you're used to if you've been contributing to a traditional 401(k). The upside to this is that you're allowed to withdraw your savings tax- and penalty-free once you turn 59 1/2. This means all that money is yours to spend however you like in retirement. That gives you a much better sense of how far your nest egg will go because you won't have to earmark any of those dollars for future income taxes. And many employers offer a 401(k) match for contributions you make to your traditional or Roth 401(k). Your company might match your Roth contributions with pre-tax dollars, but it could still go a long way toward improving your retirement readiness. If you make $40,000 per year and your employer gives you a 100% match on up to 4% of your income, you would contribute $1,600, and your job would provide another $1,600. If that's invested for 20 years, that $3,200 could grow into more than $21,500 with a 10% average annual return. 2. The Roth IRA Roth IRAs are similar to Roth 401(k)s in that you fund them with after-tax dollars. You pay taxes on your contributions when you make them, but they allow tax-free withdrawals in retirement. There are a few key differences in terms of account rules. First, Roth IRAs have lower contribution limits. You can only contribute up to $7,500 in 2026 if you're under 50, whereas you can contribute up to $24,500 to a 401(k) if you're under 50 this year. However, the $7,500 limit should be plenty for most people. Roth IRAs also give you more investment options than 401(k)s. This gives you greater control over how you invest your money and how much you pay in investment fees. Focusing on low-fee investments, like index funds, is a great way to grow your wealth while keeping your costs to a minimum. Roth IRAs also allow tax-free withdrawals of your contributions at any age. Early withdrawals could derail your retirement plans, so it's best to avoid this when possible. But if you need money in a pinch, it's a nice option to have. It's also fine to save some in both types of accounts if you can. Use your Roth 401(k) until you've claimed your match. Then, switch to a Roth IRA for the rest of the year.Read NextApr 9, 2026 •By Maurie BackmanForced Into Retirement Before You're Ready? Here Are 3 Critical Moves to Make.Apr 9, 2026 •By Kailey Hagen, CFPSocial Security Has Never Missed a Payment.

Will That Change Soon?Apr 9, 2026 •By Kailey Hagen, CFP3 Times Red Tape Could Stand in the Way of You Receiving Your Social Security BenefitsApr 9, 2026 •By Bram BerkowitzYou Can Still Contribute $7,000 to a 2025 IRA Before April 15 -- Here's Who QualifiesApr 9, 2026 •By Maurie BackmanYou Might Regret Ignoring This Social Security Strategy -- Especially If You're MarriedApr 9, 2026 •By Adam LevySpousal IRA Rules Every Married Couple Should Know Before the April 15 DeadlineAbout the AuthorKailey Hagen, CFP, is a contributing Motley Fool retirement analyst covering Social Security, Medicare, and retirement planning.

Before The Motley Fool, Kailey was a research analyst for Reviews.com focusing on credit and banking products. She is a Certified Financial Planner® and holds a bachelor’s degree in English from the University of Wisconsin-Madison.TMFKailey