Core Insights - The adoption of Roth 401(k) options is increasing among employers, with 86% of Vanguard's 401(k) plans offering this feature by the end of 2024, up from 74% four years prior [1] - Despite the growing availability, less than 20% of participants in these plans are choosing to contribute to a Roth 401(k), indicating a significant missed opportunity for many workers [2] Comparison of 401(k) Types - Traditional 401(k) contributions reduce taxable income for the year, but withdrawals in retirement are taxed as ordinary income, with required minimum distributions starting at age 73 or 75 depending on birth year [3][4] - Roth 401(k) contributions are made with after-tax dollars, leading to tax-free withdrawals in retirement and no required minimum distributions, providing retirees with greater income flexibility [4] Expert Recommendations - Financial expert Suze Orman advocates for workers to consider allocating future contributions to a Roth 401(k), even if they have primarily contributed to a traditional 401(k), as this can yield significant tax advantages later [5][6] - A diversified approach with both traditional and Roth 401(k) savings can help manage overall tax burdens in retirement, potentially lowering taxable income and reducing taxes on Social Security benefits and Medicare premiums [6]

Savings Account Features - Child savings accounts often provide tax advantages [1] - Child savings accounts may offer higher Annual Percentage Yield (APY) compared to adult accounts [1] Recommendation - Industry suggests comparing different child savings accounts to find the best APY [1]