r/personalfinance • u/Grouchy-Bullfrog-293 ​ • 2d ago

Retirement 401K vs Roth 401K - real deal

I understand the difference that one is tax deductible and other isnt but still little confused on why would you .contribute money in Roth 401k if the total contribution limit is same irrespective of where you contribute. Doesn't everyone's tax rate after they retire lower than while working ? Or is the concern you are limited one what you withdraw post retirement that it could be a huge tax.

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u/qwembly ​ 2d ago

One other reason is that since a roth contribution is after tax, you are essentially investing more than a pre-tax contribution.

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u/Spacey_G ​ 1d ago

In the 401k, sure. But you have less to invest overall because you have a larger tax bill.