401(k) plans add Roth, but participants aren’t

About 75% of 401(k) plans allowed employees to save money in a Roth account in 2019, but participants aren’t using it.


Only about a quarter of 401(k) investors do so. While many suspect that the amount is low because participants may be mistaken that there are income limits for Roth contributions (like with an IRA), I think so many people can’t afford to give up the tax deferral today by making after-tax contributions. While tax rates may be more down the road, it makes so much sense for younger workers, many of who don’t have high-earning jobs that would allow them to make after-tax contributions.


While there should be no reason for a 401(k) plan not to offer Roth, I still don’t believe that it will ever garner substantial assets.

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