Critical questions for plan participants: Should I be looking at Roth contributions?

Beth Lynch and Nathan Boxx in Retirement Planning 9 October, 2019

planningRoth contributions to your 401(k) are something to consider based on your time-horizon until retirement as well as your current and expected tax bracket in retirement. A Roth 401(k) is an option at some employer-sponsored plans, but unlike a traditional 401(k) it’s funded with after-tax dollars. This means you pay taxes on those funds now, and won’t have to pay taxes when you withdraw funds in retirement.

If you have more than 10 years until retirement and are in a low tax bracket (10 to 15 percent), a Roth 401(k) may be a good option for you. Despite how long you have until retirement a Roth 401(k) may also be a good option if you expect to be in the same or higher tax bracket in retirement and can afford to reduce spendable income now to avoid taxes later. If you’re less than 10 years away from retirement, the one caveat to consider is whether you can wait at least five years to access that money. If yes, consider the Roth 401(k), if no, consider traditional 401(k) contributions.

*This assumes you are contributing the same percentage of pay to the plan whether you choose a traditional pre-tax deferral or a Roth Contribution. Fort Pitt does not provide tax advice. We encourage you to contact your tax professional with any questions. For more information, please visit

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