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It can be a surprisingly complicated choice, but many experts prefer the Roth 401(k) because youll never pay taxes on qualified withdrawals. Contributions are made with pre-tax income, meaning you wont be taxed on that income in the current year.
In many cases, a Roth IRA can be a better choice than a 401(k) retirement plan, as it offers more investment options and greater tax benefits. It may be especially useful if you think youll be in a higher tax bracket later on.
Roth contributions are made with after-tax dollars, as opposed to the before-tax dollars you traditionally have contributed to the WDC. In other words, with the Roth option, youve already paid taxes on the money you contribute. With before-tax deferrals, you pay taxes when you take a distribution.
Generally speaking, pretax contributions are better for higher earners because of the upfront tax break, Lawrence said. But if your tax bracket is lower, paying levies now with Roth deposits may make sense.
If the marginal tax rate now (the contribution tax rate) is higher than the marginal tax rate later (the withdrawal tax rate), then the traditional account is better; if it is lower, then the Roth account is better.

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Do you think youll be in a higher tax bracket during retirement than you are now? If so, that can be a good reason to switch to the Roth. Youll pay taxes now at a lower tax rate and enjoy tax-free income later when your tax rate is higher.
Roth IRAs might seem ideal, but they have disadvantages, including the lack of an immediate tax break and a low maximum contribution. Tax Specialist | Personal finance reporter for 16+ years, including work for the Wall Street Journal and MarketWatch.

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