More than 90% of 401(k) plans now offer Roth contributions – but only 21% of workers take advantage

Published On Dec 26, 2024, 7:59 AM

The article discusses the growing popularity of Roth 401(k) plans, which now represent around 93% of employer-sponsored 401(k) plans. A legislative change, the Secure 2.0 Act, is expected to further encourage the adoption of Roth contributions as it will mandate high earners to use Roth accounts for catch-up contributions starting in 2026. Despite the widespread availability of Roth options, only 21% of eligible workers utilized them in 2023. The article emphasizes the importance of making informed decisions between Roth and traditional pretax contributions based on current and expected future tax rates.