Roth IRA or 457(b): Which is better for your retirement savings? An expert weighs in

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Sometimes, the problem with savings is less about where to get the money than which savings vehicle to put them in, since they each have their own advantages and disadvantages.

In this week's Ask the Expert for CNN's Savings Challenge, Douglas Boneparth, certified financial planner and founder of Bone Fide Wealth, breaks down the differences between a Roth IRA and a 457(b), which is offered to employees of some state and local governments and tax-exempt organizations.

A reader from Florida asks: "I am skeptical of the future conditions of the economy and the status of Social Security. Where should I focus first for investing and saving for retirement? Roth or 457(b)? I often hear: do both, balance them out; but I am specifically asking which to maximize first. And if you have an explanation as to why, that would be very helpful."

DOUG: I love this question because you're not asking whether to save for retirement. You already know you should. You're asking how to do it smarter. That's a much better conversation to be having.

The 457(b) is an underrated account, especially for public employees. Unlike a 401(k), there's no 10% early withdrawal penalty, meaning you can tap it before age 59½ without penalty. If early retirement is part of the plan, that matters a lot. Contributions also reduce your taxable income today, which is valuable if you're in a higher bracket now.

However, the Roth is powered by something the 457(b) can't match: tax-free growth and tax-free withdrawals in retirement. You pay taxes now and you never pay taxes on that money again. And here's where your Social Security concern gets interesting. Roth withdrawals don't count toward the income thresholds that determine how much of your benefit gets taxed. If benefits shrink or get taxed more aggressively down the road (which is a legitimate concern) having a tax-free income source gives you flexibility a pre-tax account simply can't.

If your 457(b) has an employer match, grab it first. But if you're forced to prioritize one, go with the Roth. Tax-free income in retirement is one of the most powerful tools available to today's savers. And given your skepticism about Social Security, you might sleep better at night knowing you had that tax-free bucket to draw from.