Company sponsored ROTH vs. 401k

If she anticipates a higher tax rate in retirement, the Roth 401(k) is likely the better choice.

If she expects her retirement tax rate to be lower, the traditional 401(k) might be better.

It's crazy to me some people reach this stage and life and are just now thinking about funding retirement accounts.

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I've also never had a company sponsored ROTH offered. Is the ROTH still more flexible even in a company sponsored plan or is it somewhat limited similar to a 401k

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My experience is they have the exact same investing options.

What is her current tax bracket?
Does she anticipate any other income sources at retirement? (Other than 401k withdrawal and SS)

Often, traditional is better than Roth if no substantial other retirement income source especially if starting late. Consider, that during retirement first $XX,xxx of withdrwals is tax free due to standard deduction then rest is taxed in low brackets and only if retirement income exceeds those is a remaining portion taxed in higher bracket. (Thus you pay effective tax rate on total withdrwal not your top marginal rate)

Roth contributions would be taxed at her highest current bracket (marginal rate). That great if income is currently low and retirement income is expected to be higher (due to pension, other income sources etc). In late 40s it's more likely she is at or near her peak earning years and income in retirement (unless she has other sources) exceed income today especially.considering effective vs marginal rate.

Note: presumably what company is offering is a Roth 401k or traditional 401k. (Not "Roth vs 401k") She could also contribute to a Roth or traditional IRA outside work (those have seperate limits). If just starting in late 40s maxing 401k and IRA might be necessary to achieve retirement goals.

A commonly overlooked factor in the traditional vs Roth discussion is state tax, in relation to where you currently live vs retirement destination. For example, if you currently work in TX, but plan to retire in LA, you may want to choose 100% Roth. Often people go the other direction because they work or claim residency in the taxing state, but it's definitely something to consider particularly on this board. To note, unless it's a federal pension, LA hits retirement pay the same as current income. Neighboring states like TX and MS have no tax on retirement funds. A good example option would be to work and reside in TX and fully fund Roth without paying state tax, and then retire in LA where you take all your Roth funds out tax free.

Another side benefit of Roth vs traditional is you can effectively save more for retirement in the Roth, if you want to maximize the annual savings limit. In the traditional case, your $23k annual tax free savings grows and then gets taxed and reduced downward from the final value. In the Roth case, you start with a number greater than $23k that gets reduced down to $23k added to savings each year. From there, your balance grows and is never reduced. In the example of a 25% effective tax rate, you would have a pile that is 33% greater in the Roth.

Again, you still have the base premise/estimate of what tax bracket you'll be in prior and post retirement.

I'm 100% roth options between my IRA and my 401k at work because with the direction this country is going, there is zero chance taxes don't increase by the time I want to retire in 20 years. At some point, the president and congress - democrat or even republican - will be forced to visit this issue in a significant way and I'm convinced the only way we don't fall off a financial cliff is by raising taxes as much as it pains me to say that. So I'd rather pay income taxes now and no taxes when I retire.

This assumes, of course, that they don't begin to tax these two types of retirement accounts by then - hopefully they don't.

My plan is to make my retirement funds last until I'm 95. I have a heart issue that will only get worse over time so either I'll die before then and my wife won't need as much or I'll have a heart transplant which will allow me to live to 95ish - either way I think planning to make it last until age 95 is solid.

I plan to withdraw $10,000 a month from my Roth options starting at 59.5 then when I'm 70 and can take the full social security benefit, I'll begin taking over $3,000 a month from there then lowering my Roth withdrawals to $7,000 a month so it's a wash and I keep my monthly income the same. I only started making respectable income three years ago (thank you History degree ) so my social security benefits aren't going to be all that high. With my wife's pension, we'll be getting an additional $4,000 a month for a total of $14,000 a month in retirement.

Inflation will be there of course but in my opinion, $14,000 a month in retirement with only about half of it being taxable is fanfrickingtastic.

You definitely should want a mix of both Roth and taxable retirement account income in retirement. That way you have flexibility to withdraw an amount of taxable income to at least take advantage of standard tax deductions and stay within certain tax brackets if you are withdrawing more taxable income above standard deductions and/or doing a Roth conversion in a particular year.

It's not optimum to be 100% Roth, not only because part of your Roth contributions were taxed that could have remained untaxed for future standard deductions. Also, if you have other income like interest, dividends, royalties, rentals, crypto sales, social security, etc in retirement that are taxable and exceed the standard deduction without any taxable retirement account funds, you will need to estimate and pay quarterly taxes. That's a hassle.

I'm retired early with about 85% Roth, 15% Traditional IRA not including my HSA. My accounts became Roth heavy, after years of Roth conversions. But I maintain and grow (through appreciation and trading) Traditional IRA funds just to pay taxes. I don't go through the hassle of paying quarterly taxes. Instead, I wait until early December every year now, figure my income taxes above and beyond the standard income tax deduction and I make a single withdrawal (or Roth conversion) from my Traditional IRA that includes Fidelity withholding the correct amounts and making my Federal and State tax payments for me. That is so much easier doing this rather than trying to estimate and pay quarterly taxes. It's also much more accurate than quarterly estimated payments and I hold all of my single tax payment until December each year. I decide the final amount of how much tax I will pay by how much Traditional IRA I withdraw or convert to Roth in December. It's really flexible and easy.