Contributing to a 401(k) plan – Traditional or Roth?

Description

Abstract: Most employers’ 401(k) plans provide the option of making contributions on a pre-tax (traditional) or after-tax (Roth) basis. Which option is the right choice depends on several factors, including a person’s current and expected future tax circumstances and estate planning goals. This article explains the differences between the two plan options, explores scenarios when one plan makes more sense over the other and discusses the estate planning implications.