The 401(k) plan comes in two varieties — the Roth 401(k) and the traditional 401(k). Each offers a different type of tax advantage, and choosing the right plan is one of the biggest questions workers have about their 401(k). It can be a surprisingly complicated choice, but many experts prefer the Roth 401(k) because you’ll never pay taxes again on withdrawals.
However, the choice depends a lot on your individual financial situation. Here’s what you need to know about each type and why one might be better for your needs.