Dear Dave,

My current employer offers a regular 401(k) and a Roth 401(k). I’ve got several years before I retire, so which one should I choose?

Jennifer

Dear Jennifer,

Take the Roth!

If you put your money into a Roth 401(k), and by retirement age there’s $1 million in there, that money is yours tax-free. By comparison, if it’s in a regular 401(k), you’ll pay taxes on that $1 million, which will come out to about $300,000 — maybe $400,000 at the rate things are going now. You’ll lose 30 to 40 percent of your money.

My personal 401(k) is a Roth. And in this situation, yours should be too!

—Dave

Dear Dave,

My mom passed away recently, and she left behind three timeshares. I inherited them, plus I’m the executor of the estate. They’re all paid for, except for the yearly maintenance fees, which total about $1,500. I don’t think I want them, but I’m not sure what to do. Do you have any advice?

Joe

Dear Joe,

I’m really sorry to hear about your mom. I know you’ve got a lot of emotions going on right now, and taking on the task of overseeing the estate is a serious responsibility.

There are two issues here. One, as the executor you have to decide what’s best for the estate. Number two, do any of the other heirs want these things? I wouldn’t want them, I can tell you that. I realise they’re basically free things — all you have to do is pay the maintenance fees — but by the time you do that, you probably could’ve gone somewhere else. For that kind of money, you can stay in some pretty nice spots and not have the ongoing liability.

Right now, the estate has the responsibility for the maintenance fees. I would call the timeshares and tell them the estate isn’t going to keep them, and that you’re going to deed them back to the companies. The way I look at it, you can have a lot of fun for $1,500 a year. You can go where you want, when you want. You’re not roped into a specific place and date. Part of the appeal of getting away is being able to go where you like at a time that’s right for you.

I understand there may be some sentimental value attached to these, Joe. But timeshares are a horrid, inconvenient product. My sentiment would be, “I’m out of here!”

—Dave

Dave Ramsey is America’s trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover, EntreLeadership and Smart Money Smart Kids. His newest best-seller, Smart Money Smart Kids, was written with his daughter Rachel Cruze, and recently debuted at #1. The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations.

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