How do I choose between a Roth 401(k) and a traditional 401(k)?

The choice is really about when you want to pay tax. With a traditional 401(k), contributions are usually pretax, so they can lower your taxable income now. With a Roth 401(k), contributions are after tax, so you do not get the upfront deduction, but qualified withdrawals can be tax-free later.

If your tax rate is likely to be lower in retirement than it is today, traditional contributions can make sense. If you think your tax rate may be higher later, or you want some tax-free money in retirement, Roth contributions can be attractive. A lot of people like having both so they are not putting every dollar into one tax bucket.

The best move is not usually “always Roth” or “always traditional.” It is picking the mix that fits your current tax bracket, your future expectations, and the options your employer plan actually gives you.