Comparing a 401k vs Roth 401k for Older Age Groups

Comparing a 401k vs Roth 401k can provide you with valuable information in order to help you choose a retirement account. Here are a few things to consider about a 401k and Roth 401k account.

Tax Bracket

Your tax bracket should play a large role in your decision. If your tax bracket is lower now than you expect it to be during retirement, a Roth 401k would make the most sense. This will allow you to pay your taxes at a lower rate now and avoid paying them at the higher rate later. However, if you believe that your tax bracket will be lower once you reach retirement age, a traditional 401k would be better for you.

Tax Rate Changes

Many people wonder whether the government will leave the tax rates as they are for the foreseeable future. Historically, tax rates do tend to change from time to time. Therefore, by using a Roth 401k, you can make sure that you do not have to pay higher tax rates in the future. This provides you with some level of certainty about your retirement funds.


Since you are funding a Roth 401k with after-tax dollars, you are actually putting more money aside for your retirement with this option. You can put $16,500 into either account each year or $22,000 if you are over 50. If you want to save as much money as possible, the Roth 401k is the better option for you.

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