Finance guru reveals the account you should be 'putting every single cent into' for major tax benefits and a supercharged retirement fund

Personal finance expert Suze Orman has some strong words for Americans looking to eventually retire - put all the money you can into a Roth IRA.

A Roth IRA is a type of Individual Retirement Account where you contribute after-tax dollars from your paycheck - and as money whiz Orman points out, all future withdrawals are tax free.

That's a great deal more financial freedom then that offered by other retirement plans, including a 401(k).

Those types of accounts are funded with pretax money, she adds - so your full dollar will have the opportunity to compound. 

At a time where every penny counts, the advice is more than welcome - and can give your money a much-needed boost.

A prominent personal finance expert has some strong words for Americans looking to eventually retire - put all the money you can into a Roth IRA. Pictured: A hypothetical illustration of an annual 4 percent return from the retirement plan after inflation

'If you are not saving for retirement in a Roth, I think there's a good chance you are making a mistake,' former CNBC host Suze Orman told Benzinga Tuesday, touting the specific type of retirement account

'If you are not saving for retirement in a Roth, I think there's a good chance you are making a mistake,' the former CNBC host told Benzinga Tuesday.

'In my opinion, you should absolutely be putting every single cent into the Roth version of your retirement account.'

She went on to explain how the benefits of a Roth extend far beyond their favorable tax treatment, for a variety of reasons.

'If you're planning to leave retirement savings as an inheritance, a Roth 401(k) is better here, too,' she said.

For this, she points out their flexibility, particularly in the estate planning and inheritance strategy spheres. 

'If you have a retirement account at work that matches your contribution, invest up to the point of the match,' she further advised, telling those with access to employer-sponsored retirement plans to take advantage.

'After that, fully fund your Roth IRA.'

In terms of inheritance, heirs can inherit Roth accounts without the burden of income taxes, she said - not the case with cash or estates, of which Uncle Sam will always get a piece.  

This can be a significant advantage to those in a higher tax bracket, Orman pointed out - while telling Americans how to protect the wealth they worked hard to amass.

As for why she supports Roth IRA over other alternatives, she points out their flexibility, particularly in the estate planning and inheritance strategy spheres.

For the less fortunate, there are no current-year tax benefits, so your contributions - no matter how small - can grow tax-free. 

This can be done once the account has been open for five years, or after the account holder hits the age of  59½, Orman disclaimed,  while repeatedly touting the flexibility of Roth's no-penalty withdrawals.

A Roth 401(k) - only available through certain employers - is even better, she said.

The main difference between a Roth and traditional 401(k) is when taxes are applied, she added - detailing how in a traditional 401(k), contributions are made pre-tax, whereas in a Roth 401(k), contributions are taxed up front.

But for those without access to such an opportunity,  a Roth IRA will certainly do, she said -citing how contributors can withdraw their contributions at any time without penalty, irrespective of their age or the duration of funds. 

This feature is particularly appealing to those who may need access to their funds before retirement due to unforeseen circumstances, though you will need to wait until you're 59.

Despite the clear advantages, it’s important to consult with a financial advisor to determine the best savings strategy for your specific situation, which depends on your tax bracket, ability to take financial risks, and goals after retirement.

Orman offered the advice after a decade after her wildly successful The Suze Orman Show host came off the air after 14 years. She has since founded SecureSave, a company whose sole purpose is to raise the US's savings rate

A financial advisor can consider all of these things, Orman said - a decade after her wildly successful television show host came off the air after 14 years. 

At the time considered one of the US' most visible personal finance gurus, she planned to develop a new series for Warner Bros. Telepictures Productions meant to premiere in 2016, but it was never produced. 

In 2020, she co-founded SecureSave, a firm whose sole purpose is to change the savings rate in America.

She now works relentlessly to provided emergency savings plans tailor made for working Americans, depending on their situation.