Nick Baker

Does your financial picture look like this?

→ One checking account doing all the heavy lifting
→ No savings buckets for different goals
→ Scattered investments with no clear strategy
→ No tax planning
→ Insurance policies that were never optimized
→ No estate plan

If so, you're not alone — but you do need a plan.

Roth vs. Traditional 401(k)

Which is better?

Like most financial planning decisions — it depends on your situation, tax bracket, and long-term strategy.

A simple way to think about it:

Traditional 401(k):
• Contributions may reduce taxable income today
• Investments grow tax-deferred
• Withdrawals are taxed as ordinary income in retirement
• Subject to required minimum distributions (RMDs)

Roth 401(k):
• Contributions are made with after-tax dollars
• Investments grow tax-free
• Qualified withdrawals in retirement are tax-free
• No income limits to contribute through an employer plan
• RMD rules have largely been eliminated for Roth 401(k)s

In general:

A Traditional 401(k) can make sense when your current tax bracket is higher than what you expect later in retirement.

A Roth 401(k) can make sense when you believe taxes — or your income — may be higher in the future.

For many high earners, the answer is not always one or the other. Different stages of life may call for different strategies, and sometimes using both creates additional flexibility in retirement planning.