Roth 401(k) vs. Traditional 401(k): Which Saves You More? π°
Hereβs the difference (and how to choose) π
π¨ Traditional 401(k):
β Contributions are tax-deductible now
β You pay taxes later in retirement
πͺ Roth 401(k):
β Pay taxes now
β Withdraw tax-free in retirement
So⦠which one saves more?
π‘ If you expect to be in a higher tax bracket later β Roth wins
π‘ If youβre in a high bracket now and expect it to drop β Traditional might make sense
Long-term, Roth can save you thousands in retirement β and give you more flexibility.
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