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Should I do a Traditional or Roth 401(k)?

Should I do a Traditional or Roth 401(k)?

| September 16, 2016
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401(k)

If your 401(k) or 403(b) retirement plan accepts both traditional and Roth contributions, then you will need to decide which plan works best for your retirement goals.

Both offer federal income tax advantages; however they offer them at different times:

  • Traditional accounts provide a tax break now
  • Roth accounts provide a tax advantage later

You can use this analyzer from American Funds to compare the results of traditional before-tax savings and Roth after-tax savings.

Please call us at (630) 873-3577 to discuss what plan works best in your retirement savings strategy.

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