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Roth 401(k) Knowledgebase

Comparison of Plans - Advantages / Disadvantages

Advantage / Disadvantage

Pre-tax 401(k)

Roth 401(k)

Ease of Administration

Advantage

Disadvantage

Ease of Employee Communication

Advantage

Disadvantage

Tax Rate Decreases at Retirement

Advantage

Disadvantage

Tax Rate Unchanged at Retirement

Neutral

Neutral

Tax Rate Increases at Retirement

Disadvantage

Advantage

Highest Permissible Contribution

Disadvantage

Advantage

Tax Risk Diversification

Disadvantage

Advantage

Postpone Distribution until Death

Disadvantage

Advantage

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