Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Traditional 401k means taxes later. Roth 401k means withdrawals are 100% tax free.

1 Oct 2025 · 0 min

Watch on YouTube

0:22

A short YouTube video by Craig Wear, CFP® that explains the core tax difference between traditional and Roth 401(k) plans: traditional 401(k) contributions are tax-deferred and taxed on withdrawal, while Roth 401(k) contributions are taxed up front and withdrawals in retirement are tax-free. The video highlights Roth accounts as a way to protect retirement income from potential future tax increases.

Alright, so the smartest way to protect your future from tax hikes. With a traditional 401k, you don't pay taxes now, but you will when you take the money out. With a Roth 401K, you pay the taxes up front and your withdrawals in retirement are 100% tax free. That means if the government raises taxes later, your retirement income is safe. It's one reason so many people choose a Roth 401 over traditional ones.