TL;DR
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A Kiplinger report argues that workers should weigh Roth 401(k) contributions rather than automatically choosing pretax savings. Its examples show how tax treatment, investment growth, state taxes and future income can affect the comparison, but they are hypothetical and do not establish that Roth contributions are best for everyone.
A Kiplinger report urges workers to give Roth 401(k) contributions more attention, arguing that paying income tax upfront can be worthwhile for some savers who expect long investment periods or higher taxable income in retirement. The report’s examples are hypothetical, not forecasts; the better choice depends on individual tax rates, savings behavior and circumstances.
The report’s author, a retirement-industry consultant who says they are nearly five years into retirement, describes not contributing to a Roth 401(k) as a personal regret. They say the Roth option was added to their employer plan only when they were in their mid-40s and earning at a peak level, making the immediate tax deduction from pretax contributions attractive. The account is an individual perspective, not evidence that all retirees would make the same choice.
The report cites data saying 95% of employers offer a Roth 401(k), while fewer than 20% of employees use one. It also cites Fidelity data showing Roth conversions rose 41% year over year as of the first quarter of 2026. A conversion is not the same as making Roth contributions through a workplace plan, and the report does not provide further details on the conversion figure’s calculation or comparison base.
One illustration assumes a worker earns a flat $100,000, contributes 6% for 40 years, receives a 4% employer match, earns a 5% annual return and retires in Florida. Under its assumptions, the Roth and pretax accounts reach the same pretax total, but after estimated taxes the Roth scenario has $114,156 more in retirement assets. At a hypothetical 7% return, the stated difference rises to $192,249. The report says employer matching contributions remain pretax in both cases in its example.
How Tax Timing Changes Retirement Savings
The Roth-versus-pretax decision changes when income tax is paid, not whether the contribution is subject to income tax. Roth contributions are generally made with after-tax dollars; qualified withdrawals from a Roth account can be tax-free. Pretax contributions reduce taxable income now, while withdrawals are generally taxable later. The tax treatment of investment growth can make a difference over long periods.
That trade-off matters because a worker’s tax rate can differ between employment and retirement. A person who expects a lower rate later may favor the upfront deduction, while someone who expects a higher rate, wants more tax-free funds, or values flexibility in managing taxable income may weigh Roth contributions more favorably. Those are considerations, not guaranteed outcomes.
The report’s comparison also holds the contribution amount constant. Because taxes are paid upfront on Roth contributions, an equal Roth contribution can reduce take-home pay more than an equal pretax contribution. If a saver invests the tax savings from pretax contributions elsewhere, the difference in the illustration could narrow. Actual results also depend on investment performance, fees, contribution levels, tax rules and future income.
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Roth Options Reach Workplace Plans
The report notes that Roth 401(k) contributions were not available until 2006, and that many employer plans added the option later. This history helps explain why some older workers may have spent years saving pretax simply because their plans did not offer a Roth choice. Availability and plan features still vary by employer.
Its central comparison challenges the familiar assumption that workers will always have a lower tax rate in retirement. That assumption may be reasonable for some people, but it is not certain. Retirement income can come from several sources, and tax rules and personal circumstances can change over time. The report’s Florida example excludes state income tax; it says working and retiring in states with different tax rates can alter the comparison.
Kiplinger presents the calculations as simplified illustrations. Its 5% and 7% returns are hypothetical and do not account for investment fees or charges. The report says readers should run their own numbers with a tax professional or financial adviser rather than treat the example as a personalized projection.
““it’s one of my biggest regrets.””
— Kiplinger report author, describing their retirement experience
What the Examples Cannot Predict
The calculations depend on fixed assumptions, including a flat salary, specified tax rates, a 40-year contribution period and steady annual returns. Real investment returns vary, as do wages, tax brackets, contribution patterns and retirement withdrawals. The report’s results therefore do not establish what a particular saver would gain or lose.
The report does not provide the full methodology behind the cited employer participation figures or Fidelity’s 41% year-over-year conversion increase. It also does not establish how many people converted, why they did so, or whether those conversions indicate a broader shift in workplace contribution choices. Future tax rates and the rules governing retirement accounts may change.
Compare Your Own Tax Scenarios
Workers considering a change can compare Roth and pretax contributions using their current income, expected retirement income, state tax situation, time to retirement and ability to save. They can also check whether their employer plan offers both contribution types and how it handles matching contributions. The report recommends reviewing personal calculations with a tax accountant or financial adviser.
No single option is right for every saver, and the article does not identify a policy or plan change as the next milestone. The practical next step is an individualized comparison that accounts for the tax paid now, possible taxes later, and whether any tax savings from pretax contributions would be invested.
Key Questions
What is the main difference between Roth and pretax 401(k) contributions?
Roth contributions are made after income tax is paid, while pretax contributions generally reduce taxable income in the year they are made. Withdrawals are typically taxed differently: qualified Roth withdrawals can be tax-free, while pretax withdrawals are generally taxable.
Does the report show that a Roth 401(k) is always better?
No. Its calculations are hypothetical illustrations based on fixed assumptions. A person’s tax rates, retirement income, state taxes, investment returns and savings habits can change which option is more favorable.
Why can Roth contributions reduce take-home pay more?
Income tax is paid on Roth contributions before the money enters the account. A pretax contribution generally lowers taxable income for that year, so an equal contribution amount can leave more take-home pay. The comparison changes if the pretax tax savings are invested elsewhere.
What did the report say about employer plans and Roth conversions?
It cited figures saying 95% of employers offer a Roth 401(k) and fewer than 20% of employees use one. It also cited Fidelity data showing Roth conversions rose 41% year over year through the first quarter of 2026; that conversion statistic is distinct from workplace Roth contributions.
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