The Traditional 401k and the Roth 401k

Will you choose the traditional 401k or the Roth 401k? 

Imagine your employer offers a defined contribution retirement savings plan: a 401k. Your employer will match 100% of your contributions to the plan up to a maximum of 5% of your salary. You are offered two options:

• A traditional 401k allows you to contribute pre-tax money and defer paying taxes until you begin taking withdrawals in retirement;
• A Roth 401k allows you to contribute money that has already been taxed and take tax-free withdrawals in retirement.

Will you choose the traditional 401k or the Roth 401k?