Contributions to a Traditional 401(k) plan are made on a pre-tax basis, resulting in a lower tax bill, and higher take-home pay. Contributions made to a Roth 401(k) are made on an after-tax basis, which means that taxes are paid on the amount contributed in the current year. The reverse is true once you are eligible to make 401(k) withdrawals. Withdrawals from Traditional 401(k) plans are taxable, while those made from a Roth 401(k) are not.
Traditional 401(k) or Roth 401(k)?
Traditional 401(k) vs Roth 401(k)?
After-Tax Savings at Retirement
Traditional 401(k)
Roth 401(k)
Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Deere Employees Credit Union deposits and are not NCUA insured. These products are not obligations of the Deere Employees Credit Union and are not endorsed, recommended or guaranteed by Deere Employees Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. Deere Employees Credit Union and DECU Investment and Retirement Services are not registered broker/dealers and are not affiliated with LPL Financial.
The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, CA, FL, IA, ID, IL, KS, MO, MS, NC, NE, NV, OH, SC, SD, WI
The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, CA, FL, IA, ID, IL, KS, MO, MS, NC, NE, NV, OH, SC, SD, WI
Calculators are intended for educational or general purposes and situations may differ.