Understanding Pre-Tax vs Roth Retirement Plan Contributions

In this video, you’ll get a clear explanation of how pre-tax and Roth retirement plan contributions differ, including how each option affects your taxes now and in the future.

It’s a simple, practical walkthrough designed to help you choose the contribution type that best fits your financial goals.

Key Takeaways

• Pre-tax contributions reduce your taxable income today, offering immediate tax savings while allowing your money to grow tax-deferred.

• Roth contributions are made with after-tax dollars, so there's no upfront tax break—but your withdrawals in retirement can be completely tax-free.

• The “right” choice depends on your current and expected future tax situation, making it helpful to consider whether your tax rate may be higher now or later.

• You may not need to choose just one—many plans allow you to contribute to both, giving you tax flexibility in retirement.