Saving For Retirement: Roth 401(k) Accounts

By Patricia Uceda, Spring 2015 Graduate Research Assistant

Roth 401(k)s are different from traditional 401(k)s due to their tax treatment. You will pay tax on any income you contribute to the plan upfront, but you will not have to pay income tax when you make withdrawals at retirement. Roth 401(k) plans might be well suited for you if you believe you will be in a higher tax bracket at retirement and have a long investment horizon.  Some investors even split their investments between traditional and Roth 401(k)s.  Talk to your professional about which option is best for you.