I'm 55 and retiring in 6 years. Should I be switching to Roth 401(k) contributions now?

Vanguard’s research shows many workers still underutilize employer-sponsored Roth plans, and the article frames this in the context of a 55-year-old planning to retire in six years who asks whether to switch 401(k) contributions to Roth now. It explains the core distinction: traditional (pre-tax) 401(k) contributions lower taxable income today but are taxed on withdrawal, while Roth (after-tax) contributions are taxed now and may be withdrawn tax-free if conditions are met.

The piece outlines the main considerations that should guide the decision: current versus expected future tax rates, the composition of retirement income (pensions, Social Security, investment income), employer matching rules, and required minimum distribution (RMD) treatment. It notes that Roth accounts can offer RMD advantages in certain circumstances and that converting traditional balances to Roth triggers immediate tax liability.

Given the six-year horizon, the article stresses that expectations about future tax rates are particularly important. If you expect higher tax rates in retirement, Roth contributions can be attractive; if you expect lower rates, traditional pre-tax contributions may remain preferable. The author emphasizes the need to assess current income, projected retirement income and tax brackets, and whether paying tax now would materially increase this year’s tax burden.

Vanguard’s findings are used to illustrate why many employees don’t opt into Roth plans: tax-code complexity, uncertainty about future taxes, and lack of professional guidance. For those near retirement who already hold substantial assets, increasing tax-free Roth exposure can be useful for tax diversification and estate planning, but it isn’t universally optimal.

The article concludes without a one-size-fits-all answer: based on information available now, the best choice depends on individual tax circumstances, plan details, and personal goals. It recommends running numerical scenarios with a tax advisor or financial planner and checking plan-specific rules such as contribution limits, rollover and conversion consequences, RMD treatment, and employer match handling.

Choice between Roth and traditional 401(k) matters beyond an individual: it affects timing of tax receipts and retirees’ cash flows. Wider adoption of Roth contributions shifts taxable income forward, with implications for household tax planning, estate considerations, and possibly public revenue timing. Decisions by those nearing retirement interact with pensions and Social Security to shape taxed income in retirement, influencing selling or withdrawal strategies. Findings from major providers like Vanguard therefore matter to retirement-plan design, financial-service firms, and tax-policy discussions, even if they do not move asset markets directly in the short term.