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Traditional 401(k) versus Roth 401(k)

Updated: May 8, 2023

When it comes to 401(k)s, most people have a Traditional 401(k). With more and more companies offering the Roth 401(k) option, a question comes to mind. Which of the two is actually better? The implications of choosing one over the other can be large, so make sure you think through your decision prior to checking one box over the other. This blog shows an example comparing the two alternatives, while also providing you the key factors that will determine the outcome of your 401(k).


Deciding whether to have a Traditional 401(k) versus a Roth 401(k) can be a complicated and confusing decision. Which of the two alternatives will leave one with more money for retirement? Unfortunately, we cannot know this for certain. This is because we don’t know what the future tax rate will be. Also, we do not know what tax bracket one will be in when they take distributions. However, we can do a general analysis of a couple situations and hopefully make a more educated decision when it comes to choosing between a Traditional 401(k) versus a Roth 401(k).

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