The Most Common Roth 401K Misconception
The Roth 401K Match Misconception
I’ve been hearing a common Roth 401K myth that I’d like to quickly dispel.
It goes something like this:
Why would anyone choose a Traditional 401K over a Roth 401K? After all, your company’s 401K match is equivalent and if it’s post tax with a Roth 401K, you’re really getting more money from your employer. Right?
Your employer’s match on Traditional 401K’s AND Roth 401K’s are both pre-taxed and always automatically put into a separate Traditional 401K account. Your match will be worth the same amount today and in the future, whether you contribute to the Traditional or the Roth. Clever thinking, but not reality.
Roth 401k Match Discussion:
Did you think that by contributing to a Roth 401K you were getting a bigger match?