Assignment task: All three of your friends think they know which retirement is best. Please support each person's opinions with details that prove his or her point.
SCENARIO 1: Your friend Luca says pensions and 401(k)s are the best retirement options because they offer you "free money." What does he mean by this? Why would this option be best?
SCENARIO 2: Your friend Jess says a Traditional IRA or 401(k) has the best tax advantages because you don't pay any taxes now, and you can wait until you retire to pay taxes. Why and when would this option be best?
SCENARIO 3: Your friend Rachel says a Roth IRA has the best tax advantages because you invest money that was taxed when you earned it and won't have to pay taxes when you take the money out in retirement. Why and when would this option be best?