Roth-401k vs. 401k?

[ethat001]

I am currently a fellow and my wife is a hospitalist (and supporting me). I am just starting my 401K plan and my institution offers a Roth version for the 401k plan, ie. Roth-401k. There is no income limit for this option.

From what I read, a regular Roth IRA is great because you can pass it on to your kids tax-free without a mandated withdrawal at 70yrs --> but you cannot do this with a Roth-401K. In general, I also know that a Roth may be better or worse depending on what the federal tax rates are by then -- but I'll probably be in the same tax bracket -- so I guess it's a bet on whether the gov't will raise taxes..

Any thoughts? My inclination is to go for the Roth-401K.

Here's an article about Roth-401K plans:
http://www.smartmoney.com/retirement/401k/index.cfm?story=which401k050609

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[ethat001]

I did some more research. Seems like if you roll over the Roth-401K to a Roth-IRA, you would not need withdraw from it. So you could keep it until 90yrs or give it to your kids. Another reason I may go with the Roth-401K.

http://www.pathtoinvesting.org/inve.../employerplans/traditional-and-roth-401ks.htm

 

[The White Coat Investor]

Check this out, very in-depth discussion on the topic:

http://www.diehards.org/forum/viewtopic.php?t=14166&mrr=1205370812

 

[AndyFromMDTAXES]

When you go with the Roth version of this retirement savings account, you forego a tax break today in exchange for a promise from the government that you'll be able to make tax-free withdrawals from this account down the road.

Frankly, I don't think the government will keep their word. For that reason, unless someone is in one of the lowest tax brackets, I'm not a fan of the Roth 401(k).

Check out my article, Can You Trust the Government Not To Change the Roth Rules Down the Road, at: http://www.mdtaxes.com/news1006.html.