When you become eligible to participate in your employer’s 401(k), 403(b), or 457 plan, you will have to decide what type of contributions that you want to make to the plan. Most employer sponsored retirement plans now offer employees the option to make either Pre-tax or Roth contributions. A number of factors come into play when deciding what source is the right one for you including:
• Income level
• Marital status
• Income need in retirement
• Withdrawal plan in retirement
• Abnormal income years
You have to consider all of these factors before making the decision to contribute either pre-tax or Roth to your retirement plan.