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Which Is the Best Option for You: Roth 401k or Traditional 401k?

When saving money through your job’s retirement plan , you often get to choose between Roth 401(k) vs. traditional 401(k) contributions. So, which is best? The choice comes down to when you want to pay taxes and other factors. - With Roth 401(k) contributions, you pay tax on all of your income today, but you ideally get tax-free income in retirement. For that to work, you need to satisfy specific IRS rules. - With traditional pre-tax 401(k), you reduce your income by the amount you contribute to the plan. That helps you save on taxes this year, and it might make it easier to save money in your plan. 🌞 Subscribe to this channel (it's free): Get free retirement planning resources: 🔑 9 Keys to Retirement Planning 🐢 6 Safest Investments Note that this applies to other types of plans as well. For example, if you have Roth 403(b), 457, or TSP—or even Roth Solo 401(k)—things are similar. Check with your plan administrator and tax expert just to be sure. Info from thi