Transcript: Roth or Regular 401(k)?

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Standup: If you put money in a retirement account, you probably have a choice between traditional and Roth: Traditional plans give you deductions now…a Roth offers tax-free money when you retire. But which is best? has some tips to help you decide.

Voice over 1: Everyone wants their golden years to be golden. Hard to accomplish if you don’t have enough gold.

Voice over 2: Which is why it’s so important to save as much as possible with retirement accounts. Either at home with an IRA or at work with a 401(k), 403(b) or other retirement plan.

Voice over 3: Now the law makes enrolling in a work-work related plan automatic: one less decision to make. But many employers are now offering another choice: whether you’d like a traditional plan or a Roth.

Voice over 4: Traditional uses pre-tax dollars: essentially a deduction for money you put in. But you have to pay taxes when you take that money out. A Roth is the mirror-image: no deductions going in, tax-free money coming out.

Voice over 5: There’s some complicated math involved in figuring this out: but there are simple, free calculators out there that can do the figuring for you in seconds.

Voice over 6: But the bottom line is for most people in most situations, the Roth will often be the better choice.

Standup: The problem with comparing Roth vs. Traditional is that you can’t know what future tax rates will be. So if you feel uncertain about what to do, here’s a suggestion: Do both: get a Roth and a traditional and put money in each. It could mean a less taxing retirement. For, I’m Kristin Arnold.