Tax advantages: Now or later?

While a Roth 401(k) and a regular 401(k) are essentially the same thing, according to Walter Updegrave, senior editor of Money Magazine, investors may find an edge to the Roth. Whether you pay taxes on contributions or withdrawals, the maximum dollar contributions are the same.

“You can invest up to $15,500 in after-tax dollars to a Roth. Which means that as long as the dollar amount you can contribute to a regular 401(k) and a Roth 401(k) are the same, the Roth 401(k) effectively gives you the chance to sock away more money on a tax-advantaged basis for retirement, assuming you’re willing to part with the extra bucks,” Updegrave says.