From Kiplinger · · 1m 50s
Why Roth 401(k)s Are a Retirement Regret
A retirement consultant regrets not contributing to Roth 401(k)s earlier, despite their tax benefits.
In brief
A retirement consultant regrets not contributing to Roth 401(k)s earlier, despite their tax benefits. A retirement consultant regrets not contributing to Roth 401(k)s earlier, as tax-free growth could have saved significant retirement income. Originally reported by Kiplinger.
Roth 401(k) Regret
A retirement consultant regrets not contributing to Roth 401(k)s earlier, despite their tax benefits.
Roth 401(k) Availability
95% of employers offer Roth 401(k) plans, but less than 20% of employees use them.
Consultant's Experience
The author worked as a retirement consultant for decades and didn't contribute to Roth in their 401(k).
Tax Regret
The consultant regrets not contributing to Roth 401(k)s, as tax-free growth could have saved significant retirement income.
Roth vs Pretax Tax Impact
Roth contributions avoid taxes on compounding growth, while pretax contributions defer tax until retirement.
Tax Example
A $100,000 salary with 6% 401(k) contributions and 4% employer match grows to $1.268 million by retirement.
Roth Conversion Growth
Roth conversions increased 41% year-over-year as of Q1 2:2026, according to Fidelity.
Tax-Free Growth Advantage
Roth contributions grow tax-free for decades, avoiding taxes on compounding growth.
State Tax Impact
State taxes can change the retirement tax equation, especially if working in a high-tax state and retiring in a no-tax state.
Withdrawal Differences
Pretax withdrawals require grossing up to net $10,000, while Roth withdrawals are $10,000 net.
Roth Conversions Feel Different
Roth conversions mean writing a bigger tax check upfront, which feels less comfortable than automatic withholding.
Roth 401(k) No RMDs
Roth 401(k)s don't require required minimum distributions (RMDs) during the owner's lifetime.
Inherited Tax Impact
Inherited pretax accounts have bigger tax bills during the heir's highest-earning years due to RMDs.
Current Action
If still working, consider converting to Roth 401(k) during annual enrollment this year.
The main idea
A retirement consultant regrets not contributing to Roth 401(k)s earlier, as tax-free growth could have saved significant retirement income.
