Compare Pre-tax vs Roth 401k with Tax Implications
We use your marginal rate for 401k calculations because contributions reduce income at your top tax bracket.
Contributed pre-tax, but taxed at withdrawal
Always pre-tax, taxed at withdrawal
All growth is taxed at withdrawal
Tax Rate Applied: 22%
Benefit: Lower taxable income now, tax savings today
Risk: Future tax rates may be higher
Contributed after-tax, tax-free at withdrawal
Goes into pre-tax bucket, taxed at withdrawal
All growth on your Roth contributions is tax-free
Growth on employer contributions is taxed
Tax Rate Applied: 22% (only on employer portion)
Benefit: Tax-free growth, no tax surprises in retirement
Trade-off: Pay taxes now at current rate