Roth 401(k)s have become an increasingly popular alternative to traditional 401(k)s, allowing participants to make after-tax salary deferrals to their employer plans. Many clients may have the opportunity to contribute to a designated Roth account in their 401(k), but are uncertain about the best savings strategy for their personal circumstances.
This flowchart helps you guide your clients through a series of considerations that will inform their decision whether to contribute to a Roth 401(k), and covers:
- Future tax rate expectations
- Roth IRA eligibility
- Employer matching considerations
- RMDs and future rollover options
- Additional savings opportunities through backdoor Roth contributions