As more employers offer a Roth 401(k) , it’s important that you know the main difference between pre-tax and Roth contributions. In this post, we’ll explain what each contribution is and how to decide the best option. We’ve even included the most recent SECURE 2.0 Act update, so you can stay up-to-date on Roth deferrals. What is the difference between pre-tax and Roth contributions? It can be tricky to choose between a pre-tax contribution vs. Roth 401(k). Roth and pre-tax contributions are two different ways to save for retirement in an employer-sponsored retirement account (401(k), 403(b), etc.). Each has its own tax implications and considerations. Pre-tax contributions  Pre-tax contributions allow individuals to contribute to retirement savings before taxes are taken out of their paycheck. Since taxes are deferred up front, the contributions and earnings in the account are taxed as ordinary income when the individual withdraws them during retirement. Roth contributions On the o...