Roth 401(k) vs. Traditional 401(k): Which Is Right for You in 2025?

Choosing between a Roth 401(k) and a Traditional 401(k) depends on your current and future tax outlook.

● Roth 401(k): Contributions are made with after-tax dollars, allowing tax-free withdrawals in retirement. This is a great choice if you anticipate being in a higher tax bracket later or value tax-free growth.

● Traditional 401(k): Contributions are pre-tax, reducing your taxable income now, but withdrawals in retirement are taxed. This option suits those in higher tax brackets today who expect lower income in retirement.

For many, a mix of both accounts offers flexibility and potential tax advantages in retirement.  Consider your goals and consult a financial advisor at Cornerstone Portfolios to make the best choice for 2025 and beyond!