Should I Contribute to a Roth 401(k) or a Traditional 401(k)?
Answer a few honest questions about your tax bracket, time horizon, and retirement plans, and our Decision Guide will tell you which 401(k) bucket fits you better — or whether to split.
Published
Most early- and mid-career savers in the 12% or 22% federal brackets should default to a Roth 401(k) — you're locking in low rates, getting decades of tax-free growth, and Roth 401(k)s no longer have Required Minimum Distributions thanks to SECURE 2.0. The math flips toward Traditional when you're in the 32% bracket or higher, expect to retire into a meaningfully lower bracket, or you're targeting early retirement and want a pre-tax pile to convert via a Roth conversion ladder. A few specific 2026 rules matter: there are no income limits on Roth 401(k) contributions (unlike Roth IRAs), employer match dollars can now go into the Roth side if your plan supports it, and if you're 50 or older and earned more than $150,000 in the prior year, all your catch-up contributions are required to go into Roth regardless of what you'd prefer. When the answer is genuinely close — and for many people it is — splitting your contributions across both buckets gives you tax diversification in retirement, which matters more than people realize when future tax rates and your future spending needs are unknowable.
Sources
- Roth comparison chart — Internal Revenue Service
- SECURE Act 2.0: What the new legislation could mean for you — Fidelity
- New Roth 401(k) Rule Changes: What You Should Know for 2026 — Kiplinger
- Roth 401k vs. 401k: Which Account Is Best for You? — NerdWallet
- What can Roth contributions do for me? — Vanguard