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It's not quite that simple, it really depends on what you suspect your tax rates are going to be. Roth contributions are essentially taxed at your marginal rate right now, but traditional 401k withdrawals are taxed like income when you make the withdrawal.

There are lots of situations where you would want to lower your tax burden now instead of go for the Roth.

Note that you can also have a Roth 401k or a traditional IRA.

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Worth noting that the limits are different between Roth IRAs and Traditional IRAs, though, if you have a retirement plan at work. A married couple making between 119k and 186k wouldn't get any deduction for the trad IRA, so might as well go with the Roth even if they think their income will be much lower in the future.

The Roth also lets you pull out contributions later without penalty, which is a nice worry-free safety net in case the emergency fund runs out.

One caveat. A married couple where the other person doesn't work can still contribute to a traditional IRA and the couple gets to deduct it on their taxes. The limit for this is 186k and it is called a spousal IRA.

Thanks, didn't know about that one!

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