You may have to choose between the Roth 401(k) and the regular 401(k) at your job, but you are uncertain of how to exactly go about it. A good approach to take would be to try to assess whether the immediate tax break you receive from having a regular 401(k), will be greater that the long term benefits of the Roth 401(k).

Everyone’s situation is different. It you are young, and are not making a lot of money, the best option would be the Roth 401(k). So you will forgo the immediate tax breaks on the contributions you are making, and in fact, those tax breaks would be minimal anyway since you will not be in a high tax bracket. With this option, you will legally avoid the taxes after you are retired.

On the other hand, if you already make a great deal of money, and therefore fall into a higher tax bracket, the immediate tax incentive of a regular 401(k) plan would be more beneficial to you than the Roth 401(k). This is especially true since your tax bracket will be much lower when you start to withdraw from the account.

A good piece of advice to bear in mind is to always be certain that any retirement money you invest is “tax-diversified”, which means that the accounts of these investments have a tax-deferred status. You can achieve this by making your 401(k) supplemental to any IRA plan you may have. You may consider changing your Roth IRA to the regular 401(k) at your job. In the same way, if you already own a traditional IRA, a Roth plan may be a choice to go with. If your place of work offers both kinds of 401(k) plans, then you have the option of dividing up your savings between them