Roth

"Roth" is a tax treatment, not a specific account. It applies to Roth IRAs and to the Roth option inside many 401(k) plans. In each case, contributions go in after tax — no deduction today — and qualified withdrawals in retirement are entirely tax-free, growth included. Traditional accounts flip the timing: deduct now, pay tax at withdrawal.

If your tax rate were identical now and in retirement, the two approaches produce the same after-tax money — the math is symmetric. So the choice reduces to one question: is your tax rate likely higher now, or higher when you withdraw? A high-earning year makes the traditional deduction more valuable; a low-earning year makes prepaying tax under Roth relatively cheap.

Nobody knows future tax rates or future income with certainty. Some people split contributions between both treatments so neither guess has to be right, which also buys flexibility later. Roth IRA eligibility phases out above certain income thresholds; Roth 401(k) contributions do not have that income limit.