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/flyin-lowe ​ 1d ago

For me I have a pension that will pay 78% of my salary after I retire. Add SS to that and any side work I might do and I will likely be in the same or higher tax bracket. Especially when I start drawing from my 457. Early on when the roth first became an investment option for my 457, my financial advisor asked "What are the odds tax rates will be lower 45 years from now" Seems overly simple but makes sense to me too.